CMS Energy

Methodology

CMS Energy's regulated electric and gas utility operations in Michigan provide highly predictable earnings based on approved rate structures and infrastructure investment plans. The company's pure-play regulated utility model creates stable earnings visibility. This calculation works very well for CMS given regulatory protections and consistent execution, making fair value estimates reliable barring major regulatory changes or operational issues.

Methodology

CMS Energy's PEG ratio typically ranges from 2.5-3.5, appearing expensive but reflecting the bond-like stability of regulated utility earnings and Michigan's generally constructive regulatory environment. The company's consistent mid-single-digit earnings growth from rate-base expansion justifies premium valuations given defensive characteristics. Compare to other Midwest utilities to assess whether CMS's execution track record and regulatory relationships command appropriate pricing.

Methodology

CMS Energy's dividend yield (typically 2.5-3.0%) is central to the investment thesis for a regulated utility focused on steady income and capital preservation. The company targets consistent dividend growth aligned with earnings growth from infrastructure investment. PEGY provides essential context for utility investors, as the combination of yield and predictable growth creates the defensive total return profile that attracts income-focused capital to regulated utilities.