Yahoo Finance 2 Days Left To Cash In On CMS Energy Corporation (NYSE:CMS) Dividend,
Have you been keeping an eye on CMS Energy Corporation’s (NYSE:CMS) upcoming dividend of US$0.36 per share payable on the 30 November 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 01 November 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into CMS Energy’s latest financial data to analyse its dividend attributes.
See our latest analysis for CMS Energy
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
Does CMS Energy pass our checks?
CMS Energy has a trailing twelve-month payout ratio of 73%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 61%, leading to a dividend yield of around 3.1%. However, EPS should increase to $2.46, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of CMS it has increased its DPS from $0.36 to $1.43 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, CMS Energy produces a yield of 2.9%, which is on the low-side for Integrated Utilities stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank CMS Energy as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for CMS’s future growth? Take a look at our free research report of analyst consensus for CMS’s outlook.
Historical Performance: What has CMS’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
