CMS Energy Strives to Lift Michigan - Analyst Blog
June 03 2011 - 12:34PM
Zacks
Consumers Energy, the major subsidiary of CMS
Energy (CMS) pledged its support for the economy of
Michigan. The pledge came with a commitment to invest an additional
$250 million in the state over the next five years. The company
will use only small and medium-sized Michigan-based suppliers. The
money will be used to fund projects related to equipment and
services for renewable energy.
The utility's commitment to increase spending in Michigan
follows the launch of new Pure Michigan Business Connect initiative
by Governor Rick Snyder of the Michigan Economic Development
Corporation. Not ignoring its peer company in Michigan, DTE
Energy Company (DTE) also pledged an additional investment
of $250 million in the state.
Consumers Energy is already in the midst of a five-year, $6
billion capital investment plan for Michigan. CMS Energy’s
regulated electric power operations in Michigan generate a
relatively stable earnings stream. Thus growth prospects look
robust for CMS Energy with a constructive regulatory environment
along with steady recovery in the Michigan economy.
CMS Energy reaffirmed its guidance at adjusted earnings of $1.44
per share for fiscal 2011. That's an increase of about 6%
from fiscal 2010 adjusted earnings of $1.36. This is consistent
with the company's long-term plan of 5%–7% annual earnings
growth.
CMS Energy is making substantial investments in renewable
energy, environmental quality, energy efficiency and other areas to
continue to provide customers with safe, reliable and affordable
service. The company also recently updated its renewable energy
plan reaffirming the company's commitment to meet Michigan’s 10%
renewable energy standard.
The company already is the largest supplier of renewable energy
in Michigan. As of now 5% of the power supplied to its 1.8 million
electric customers comes from renewable sources. Going forward the
company plans to invest more than $6 billion in its utility
operations through 2015, making it one of the largest investors in
Michigan.
We maintain our Neutral rating on CMS Energy. The quantitative
Zacks #3 Rank (short-term Hold rating) for the company indicates no
directional pressure on the shares over the near term. In the
near-term we would advise investors to focus on its Zacks #2 Rank
(short-term Buy rating) peers like Avista
Corporation (AVA) and Cleco Corporation
(CNL).
AVISTA CORP (AVA): Free Stock Analysis Report
CMS ENERGY (CMS): Free Stock Analysis Report
CLECO CORP (CNL): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis Report
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