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Here's Why You Should Add CMS Energy (CMS) to Your Portfolio

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Earnings estimates for CMS Energy Corporation (CMS - Free Report) have been revised upward in the past 30 days. The Zacks Consensus Estimate for 2019 has inched up 0.4% to $2.51. Estimates for 2018 remain unchanged at $2.33. CMS Energy’s earnings have surpassed the Zacks Consensus Estimate in three out of the trailing four quarters.

In a year's time, the stock has returned 4.9% against its industry’s decline of 0.2%. The company currently carries a Zacks Rank #2 (Buy).

Let’s focus on the factors that make CMS Energy a profitable bet.

VGM Score: The stock carries an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Backtested results indicate that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Capital Expenditure Program: CMS Energy is currently focused on capacity maximization, reliability improvement, clean power generation and infrastructure upgrade. The company has a solid capital expenditure program, wherein it plans to spend $10.1 billion on infrastructure upgrades and replacements as well as electric supply projects from 2018 through 2022. It will spend $4.9 billion for Gas Infrastructure, $3.5 billion for Electric Distribution and $1.7 billion for Electric Supply.

Consumers Centric Decisions: CMS Energy is taking initiatives for the benefit of customers. The company’s cost structure aids in reducing residential electric bill and residential gas bill by 6% and 37%, respectively, from 2013’s level. Moreover, the decision to pass on the savings of federal tax reform to customers is projected to lower bills by up to 4%. This is anticipated to attract more customers to CMS Energy, consequently increasing customer base.

Dividend Distribution: CMS Energy pays dividend on a regular basis. In Jan 2018, the company increased its quarterly dividend to 35.75 cents per share, up 7.5% from 33.25 cents. During the first quarter, CMS Energy paid dividends worth $101 million, up from the year-ago quarter’s dividend payment of $94 million. The company expects long-term dividend growth to be in line with its EPS growth guidance 6–8%. This initiative will enable the company to retain investor interest in the stock.

Other Stocks to Consider

Other top-ranked stocks in the same industry include Ameren Corporation (AEE - Free Report) , Avangrid, Inc (AGR - Free Report) and Otter Tail Corporation (OTTR - Free Report) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ameren delivered an average positive surprise of 7.69% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has inched up 0.7% to $3.04 in the last 90 days.

Avangrid delivered an average positive surprise of 7.79% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 0.4% to $2.38 in the last 90 days.

Otter Tail delivered an average positive surprise of 14% in the last four quarters. The 2018 Zacks Consensus Estimate for 2018 earnings has increased by a penny to $2.00 in the last 90 days.

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