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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cms Energy Corporation (XNYS:CMS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CMS
Name:
CMS ENERGY CORPORATION (XNYS:CMS)
Sector:
187.00M
Industry:
Utilities�Regulated Electric
CEO:
Ms. Patricia Poppe
Total Employees:
8,504
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -12.81% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CMS ENERGY CORPORATION(CMS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED ELECTRIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
67.14
One Month Price Target:
$67.25
Six Month Price Target :
$67.78
Likely Price in One Year's Time:
Ticker:
$68.41
Likely Trading Range Today Under (Normal Volatility)
$66.96
Price Upper limit ($) :
$67.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$64.73
This week:
$61.76
This month :
$56.37
Other Primary facts
Market Cap:
19.55B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
290.20M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.82%
-12.29%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$78.32
$73.19
$55.96
$61.09
Medium risk (<10%) entry points
Buy Call
Sell Call
$71.53
Buy Put:
Sell Put:
$70.43
$62.74
$63.85
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CMS
Sharpe Ratio:
1.11%
Comparison:
CMS, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -5.26% lower than the industry
& is -51.30% lower than the market/S&P 500 average
Average Returns/Yield of
CMS
Daily returns:
0.03%
Weekly returns:
0.14%
Monthly returns:
0.57%
Yearly returns:
7.85%
Comparison of returns:
Average annual returns/yield (last 3 years) is -13.18% below industry average
Classification:
CMS, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.81
Statistical test of Returns:
CMS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.76%
Weekly Volatility:
3.94%
Monthly Volatility:
7.87%
Yearly Volatility:
27.27%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.19%
Volatility in last five trading days has been -32.25% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.59%
Weekly VaR:
-8.02%
Monthly VaR:
-16.04%
How Much Can the price of
CMS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-55.57%
This translates to price declining to:
$57.83
This translates to price declining to:
$29.83
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CMS is a 13.22% riskier investment compared to the market/S&P 500 & is -3.01% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -13.25% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CMS
Beta in relation to market/S&P 500--0.28
Expected beta in 1 year's time:
0.418
Expected beta in 3 year's time:
0.591
Unlevered (debt free) Beta:
0.163
Beta in relation to Nasdaq (XNAS):
0.392
Beta in relation to all global stocks::
0.606
Beta Comparison & Analysis
Beta of competitors/peers::
0.513
Beta is -45.00% lower than peers
Average Industry Beta:
0.5
Beta is -43.50% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.14%
Sustainable growth rate is 219.20% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.017
Alpha is 35.60% above industry average alpha yield
Alpha is 110% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CMS
Equity cost of capital:
0.051
Equity cost of capital is -22.65% below industry mean WACC
Unlevered (without debt) cost of capital:
2.93%
Before-tax cost of debt:
3.00%
After-tax cost of debt:
2.37%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.37%
WACC is -19.23% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$26.50
Revenue growth rate per share of (3Y):
1.99
Annual revenue growth rate is -438.98% below industry average
EPS:
$4.66
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$5.55
Balance sheet equity growth per share: 22.08%
Equity growth rate per share is 276.22% higher than the industry
Debt per share
$27.74
EBITDA per share
$9.70
Valuation Analysis Today of
CMS
P/E Ratio:
27.19
P/E Ratio of Competitors/Peers:
19.12
P/E ratio is 42.16% higher than main peers & is -1.82% lower than the industry
Stock price/value with industry average P/E ratio: $129.03
CMS is -47.96% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $101.46
Present value of the expected future dividends only: $57.29
P/S (Price to Sales ratio):
2.53
Price to sales ratio is -12.72% below the industry mean
P/B (Price to book value ratio):
1.99
Price to free cash flow: 12.09
Price to free cash flow ratio is -67.74% lower than the industry
Net income growth rate (3Y):
97.60%
Net income growth rate is -3413.63% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 10.07%
Dividend yeild: 2.67%
Previous Dividend: $0.46
Previous adjusted dividend: $0.46
Previous Dividend: $1.79
Expected next dividend best case: $0.48
Expected next dividend worst case: $0.44
Average dividend payment (long-term): $0.42
Average dividend increase/decrease (growth rate) % per period: 1.90%
Expected next dividend payment date: 29/08/2022
Expected next dividend record date: 08/04/2022
Expected next dividend declaration date: 21/07/2022
Previous dividend payment date: 31/05/2022
Previous dividend record date: 05/06/2022
Previous dividend declaration date: 22/04/2022
Dividend History:
2022-05-05--$0.46
2021-11-04--$0.44
2021-05-06--$0.44
2022-02-10--$0.46
2021-08-05--$0.44
2021-02-04--$0.44
Dividend growth rate is -290.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
82.14%
Net debt to equity ratio:
85.84%
Debt to assets ratio:
29.69%
Net debt to assets ratio:
31.03%
Debt-to-asset ratio is -52.76% below industry average
Ability to repay debt:
Interest coverage ratio:
11.12
Interest coverage ratio is 331.99% more than industry average
Looking forward:
Debt growth rate:
-45.72%
Annual debt growth is -200% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.559
Statistical significance of correlation:
CMS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.597
Stock price is -6.33% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.597
Correlation of price movement with Nasdaq (^IXIC):
0.04
Covariance of price movement with the market:
0.041
Kurtosis
11.805
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.022
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CMS
Gross Profit Margin Ratio:
122%
Operating Profit Margin Ratio:
15.24%
Operating profit margin is 30.99% higher than the industry
Net Profit Margin Ratio:
122%
Effective Tax Rate:
10.79%
Effective tax rate is -46.44% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.77%
Return on equity (ROE) is 51.52% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.98%
Return on assets (ROA) is 115.33% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.13
Current ratio is -52.81% below industry average
Cash Conversion Cycle (days):
-8.3
Cash conversion cycle is -108.82% below industry average
The remaining useful life of property plant & equipment is: 9.0 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
904.3K
Each employee generates -67% less revenue than industry average revenue per employee
EBITDA generated per employee:
330.9K
Each employee generates -72% less EBITDA than industry average revenue per employee
Profit generated per employee:
158.7K
Each employee generates -61% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
22.0K
Each employee generates -167% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.0M
Each employee generates -167% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CMS
Avangrid, Inc. (XNYS:AGR)
BROOKFIELD INFRASTRUCTUR PARTNER UNT (XNYS:BIP)
DUKH
Fortis Inc. (XNYS:FTS)
Evergy, Inc. (XNYS:EVRG)
THE AES CORPORATION (XNYS:AES)
ENTERGY CORPORATION (XNYS:ETR)
PPL CORPORATION (XNYS:PPL)
AMEREN CORPORATION (XNYS:AEE)
Current Analyst Ratings
Strong buy�8%
Buy�17%
Hold�33%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.69B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.25B
2.44B
-
-
-
-
4.41B
4.41B
2.00M
253.00M
1.12B
2.81B
1.17B
1.35B
853.00M
92.00M
1.35B
Statement of Cash Flow
Date:
Period:
345.00M
Differed Income Tax :
33.00M
Stock Based Compensation :
-
Change in Working Capital :
- 16000.00K
Accounts Receivables:
- 121000.00K
Other Working Capital:
-
Other Non-Cash Items:
- 6000.00K
Net Cash Provided by Operating Activities:
707.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
12.00M
-
12.00M
1.01B
169.00M
755.00M
1.95B
21.50B
-
-
-
287.00M
3.38B
25.17B
-
27.11B
647.00M
374.00M
-
-
703.00M
1.72B
8.05B
5.04B
15.55B
31.14B
17.31B
10.64B
1.94B
- 31000.0K
-
March 31, 2022 at 6:00:00 AM
7.87B
9.80B
27.11B
-
8.43B
8.4B
-
- 539000.00K
- 539000.00K
-
4.00M
-
- 136000.00K
- 38000.00K
- 170000.00K
-
- 2000.00K
474.00M
476.00M
707.00M
- 520000.00K
187.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
CMS
2023
2024
2025
2026
2027
$68.75
$98.54
$100.41
$102.32
$104.26