CMS Energy to Gain From Key Investments & Renewable Expansion

CMS Energy Corporation CMS is enhancing its operations through planned investments while continuing to provide dependable, high-quality services to its customers. The company is expanding 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 making significant investments in infrastructure upgrades and replacements, as well as clean power production, to improve customer satisfaction and operational resiliency. The company aims to make $20 billion in capital expenditures between 2025 and 2029.

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 reduced its coal-generating capacity to minimize emissions from its power generation assets. The company intends to retire the J.H. Cambell coal-fired unit in 2025 and the D.E. Karn oil and gas-fueled unit in 2031. These retirements will help CMS fulfill its objective of terminating the use 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 18.3% compared with the industry’s growth of 17.8%.

Stocks to Consider

Some better-ranked stocks from the same industry are Entergy Corporation ETR, 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. 

ETR’s long-term (three to five years) earnings growth rate is 9.5%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $3.88, which indicates year-over-year growth of 6.3%.

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 implies 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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