CMS Energy Thrives on Strategic Investments & Renewable Growth

CMS Energy Corporation CMS is strengthening its operations through planned investments and continues to gain from providing reliable, high-quality services to its customers. The company is increasing its renewable energy portfolio while phasing out coal-generating units.

However, this Zacks Rank #3 (Hold) company faces risks related to its unfavorable costs associated with the shutdown of solid waste disposal facilities for coal ash.

Positive Drivers for CMS Energy

CMS Energy is heavily investing in infrastructure upgrades and replacements, as well as clean power production, to promote customer satisfaction and operational resiliency. During the 2025–2029 period, the company intends to make capital expenditures worth $20 billion.

CMS Energy intends to add 9 gigawatts (GW) of solar and 2.8 GW of wind to its renewable generation portfolio between 2025 and 2045. The company also announced plans to build an 85-megawatt (MW) solar array at the former D.E. Karn coal-generating facility, which is planned to be operational by 2026. CMS Energy intends to invest $5.2 billion in renewable energy resources, including wind, solar and hydroelectric generation, between 2025 and 2029. Such measures should help CMS Energy diversify its renewable energy portfolio.

CMS has lowered its coal-generating capacity to reduce emissions from its power generation assets. The company plans to retire its J.H. Cambell coal-fired unit in 2025 and the D.E. Karn oil and gas-fueled unit in 2031. These retirements will aid CMS in meeting its goal of ending the usage of coal-fueled generation in 2025.

Factors That May Hinder CMS Stock

As environmental rules governing carbon emissions during electricity generation become increasingly rigorous, there is still cause for concern, despite the fact that the company's power-generating facilities have implemented many pollution-control measures. Nearly 20% of its overall generation came from coal as of Dec. 31, 2024. CMS incurs significant costs associated with the development, operation and closure of solid waste disposal facilities for coal ash. To comply with these laws, consumers expect the company to spend $237 million between 2025 and 2029.

As of March 31, 2025, CMS Energy had $0.53 billion in cash and equivalents, $16.26 billion in long-term debt and $0.71 billion in current debt, indicating a weak solvency position due to higher debt than cash reserves.

CMS Stock Price Movement

In the past year, CMS shares have risen 15.5% compared with the industry’s growth of 15.8%.

Stocks to Consider

Some better-ranked stocks from the same industry are DTE Energy Company DTE, CenterPoint Energy CNP and NiSource Inc. NI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

DTE’s long-term (three to five years) earnings growth rate is 7.6%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $7.24, which indicates year-over-year growth of 6%.

CNP’s long-term earnings growth rate is 7.8%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $1.75, which calls for a year-over-year increase of 8%.

NiSource’s long-term earnings growth rate is 7.9%. The Zacks Consensus Estimate for its 2025 earnings per share is pegged at $1.88, which indicates year-over-year growth of 7.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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