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CMS Energy Commences $610M Saginaw Pipeline Renewal Project

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CMS Energy Corporation’s (CMS - Free Report) primary subsidiary, Consumers Energy initiated the construction and replacement of its aged Trail Pipeline, a project work of approximately $610 million.

This five-year project over the Saginaw Trail Pipeline that began in the month of June is expected to conclude in December 2022, and will be constructed in five phases in Saginaw, Genesee and Oakland counties. The project is being undertaken mainly to increase the level of natural gas reliability and safety for Michigan customers. A new 94 miles of 24-inch pipeline will be replacing the 78 miles of 12 and 16-inch Saginaw Trail pipeline dating back to the 1940s.

The Outcome

The Pipeline Replacement will help enhance reliability for customers and ensure uninterrupted supply of natural gas for Michigan homes and businesses going ahead. This new renewal project will not only help customers to make use of affordable and clean natural gas fuel but also economically benefit the Michigan Community to take advantage of construction jobs.

Other Projects of CMS Energy

Under the electric utility operations, the company looks steady to focus on strengthening circuits and substations, replacing aging poles and installing smart meters. Between 2017 and 2026, it plans to invest around $6 billion in electricity grid operations. Meanwhile, the company has plans to roughly invest approximately $0.7 billion for electricity reliability and distribution activities.

The company plans to deploy around $8 billion for its projects under gas operations between 2017 and 2026.

Our View

CMS Energy’s regulated electric power operations in Michigan generate a relatively stable and growing earnings stream. With its current focus on issues such as capacity maximization, reliability improvement, clean power generation and infrastructure upgrade, the new Saginaw Pipeline Renewal project is going to fulfill a long-term commitment of working for safer communities and delivering affordable natural gas for its customers.

Price Movement

CMS Energy has outperformed the industry in the last 12 months. The company’s shares gained 16.2% against the industry’s growth of 9.7%.

CMS Energy’ ongoing capital investments to strengthen its infrastructure and initiatives to lower operation and maintenance expenses are driving its performance.

Stocks to Consider

CMS Energy currently carries a Zacks Rank #3 (Hold).

Investors can consider better-ranked stocks like Otter Tail Corporation (OTTR - Free Report) , Ameren Corporation (AEE - Free Report) and CenterPoint Energy, Inc. (CNP - Free Report) from the same industry. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Otter Tail posted second-quarter 2017 earnings from continuing operations of 42 cents per share, beating the Zacks Consensus Estimate of 41 cents per share by 2.44%. The company’s 2017 estimates increased by 3 cents to $1.73 per share in the last 90 days.

Ameren posted second-quarter 2017 earnings from continuing operations of 79 cents per share, beating the Zacks Consensus Estimate of 69 cents by 14.49%. The company’s 2017 estimates increased by 3 cents to $2.80 per share in the last 90 days.

CenterPoint Energy posted second-quarter 2017 earnings from operations of 29 cents per share, beating the Zacks Consensus Estimate of 21 cents per share by 38.10%. The company’s 2017 estimates increased by 3 cents to $1.31 per share in the last 90 days.

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