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On Apr 12, 2013, shares of CMS Energy Corporation (CMS - Analyst Report) hit a 52-week high of $28.76. CMS Energy registered positive earnings surprises in the last three quarters, with an average beat of 3.75%.

In 4Q12, the company reported strong results, with earnings of 25 cents per share increasing 56.3% from the 4Q11 level. Total revenue of $1.67 billion surpassed the year-ago figure of $1.62 billion by 3.1%.  

CMS Energy continues to strengthen its distribution system and generation assets through projects such as advanced metering infrastructure (AMI) and renewable (wind) investments. The company has plans to spend $6.5 billion over the 2013 to 2017 time period.  

We expect these regulated investments will allow the company to achieve its long-term EPS growth target of 5% to 7%. CMS Energy is also planning to reduce its operation and maintenance expenses, which will have a positive impact on margins.

The strong performance of the company is expected to continue in 2013 as well. CMS Energy expects earnings per share for 2013 in the range of $1.63 to $1.66, surpassing the 2012 mark.

We expect long-term earnings growth of 5.97%. The Zacks Consensus Estimates for 2013 and 2014 are $1.65 and $1.74, respectively. This reflects year-over-year growth of 6.22% in 2013 and 5.96% in 2014.

The present valuation also makes the company attractive. Shares of CMS Energy Corporation currently trade at 17.45x 12-month forward earnings, an 8.4% discount to the peer group average of 19.05x. In addition, ROE of the company is 13.3%, higher than the peer group average of 8.2%.

The company has consistently paid dividends to its shareholders and has raised its quarterly dividend seven times in as many years. The incremental dividend reflects the strength and successful execution of the company's business strategy. The current annual dividend is $1.02 per share.

CMS Energy currently carries a Zacks Rank #2 (Buy). Besides CMS Energy other electric utilities like Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report), Huaneng Power International, Inc. (HNP - Snapshot Report) and Empresa Nacional de Electricidad S.A. (EOC - Snapshot Report) are also performing well and currently have a Zacks Rank #1( Strong Buy).

Based in Jackson, Mich., CMS Energy was founded in 1987. The company primarily operates in Michigan and has three operating segments, namely, Electric Utility, Gas Utility, and Enterprises.

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