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CMS Energy Corporation 5.875% J (CMSC)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$82.11 - $217.80$125.55
Multi-Stage$58.69 - $63.99$61.29
Blended Fair Value$93.42
Current Price$23.78
Upside292.85%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.50%7.89%2.091.941.831.701.561.461.361.261.161.08
YoY Growth--8.12%6.04%7.27%8.99%7.11%7.13%7.96%8.65%7.76%9.90%
Dividend Yield--9.34%7.94%7.56%6.59%5.65%5.78%5.18%5.06%4.66%4.32%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,047.00
(-) Cash Dividends Paid (M)652.00
(=) Cash Retained (M)395.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)209.40130.8878.53
Cash Retained (M)395.00395.00395.00
(-) Cash Required (M)-209.40-130.88-78.53
(=) Excess Retained (M)185.60264.13316.48
(/) Shares Outstanding (M)299.13299.13299.13
(=) Excess Retained per Share0.620.881.06
LTM Dividend per Share2.182.182.18
(+) Excess Retained per Share0.620.881.06
(=) Adjusted Dividend2.803.063.24
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$82.11$125.55$217.80
Upside / Downside245.27%427.96%815.92%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,047.001,115.061,187.531,264.721,346.931,434.481,477.52
Payout Ratio62.27%67.82%73.36%78.91%84.45%90.00%92.50%
Projected Dividends (M)652.00756.21871.22997.981,137.551,291.031,366.70

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)686.64693.15699.66
Year 2 PV (M)718.29731.97745.78
Year 3 PV (M)747.11768.55790.41
Year 4 PV (M)773.24802.97833.56
Year 5 PV (M)796.83835.32875.28
PV of Terminal Value (M)13,833.0114,501.1515,194.86
Equity Value (M)17,555.1218,333.1219,139.54
Shares Outstanding (M)299.13299.13299.13
Fair Value$58.69$61.29$63.99
Upside / Downside146.80%157.73%169.07%

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