CMS Energy Corp (CMS) stock analysis

P/E above its 5-year median

CMS Energy's P/E of 25.1 is above its own 5-year median of 20.7.

P/E above the industry

CMS Energy's P/E of 25.1 is above the Combination Electric and Gas, and Other Utility median of 19.2.

EV/EBITDA above its 5-year median

CMS Energy's EV/EBITDA of 16.3 is above its 5-year median of 13.8.

P/B above the industry

CMS Energy's price-to-book of 2.27 is above the Combination Electric and Gas, and Other Utility median of 1.70.

Trading above fair value

The share price of $70.38 is above our fair value estimate of $61.92.

Margin of safety under 20%

The price is 13.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 7.4% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -16.7% over the last twelve months, against a 5-year average of 7.2% a year.

Growing faster than the industry

Revenue grew 8.2% over the last twelve months; the Combination Electric and Gas, and Other Utility median is 5.2%.

Guidance raised

CMS Energy raised its 2026 adjusted earnings guidance outlook on Feb 5, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 9.4% over the last twelve months and averaged 14.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

CMS Energy's return on equity of 9.4% is above the Combination Electric and Gas, and Other Utility median of 9.2%.

Earnings grew over 5 years

Net income grew 7.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 9.7% over the last twelve months, against a 5-year average of 13.2%.

Net margin below the industry

CMS Energy's net margin of 9.7% is below the Combination Electric and Gas, and Other Utility median of 12.7%.

High debt

Debt is 206% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 224% five years ago to 206%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 11.4% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.5 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.95 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.81; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

CMS Energy paid dividends worth 2.4% of the share price over the last twelve months.

Yield below Treasuries

The 2.4% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; CMS Energy yields 2.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.