Head-To-Head Contrast: CMS Energy (NYSE:CMS) and Eversource Energy (NYSE:ES)

CMS Energy (NYSE:CMS) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Dividends

CMS Energy pays an annual dividend of $2.17 per share and has a dividend yield of 3.0%. Eversource Energy pays an annual dividend of $3.01 per share and has a dividend yield of 4.1%. CMS Energy pays out 62.7% of its earnings in the form of a dividend. Eversource Energy pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CMS Energy has increased its dividend for 3 consecutive years and Eversource Energy has increased its dividend for 2 consecutive years.

Earnings & Valuation

This table compares CMS Energy and Eversource Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CMS Energy	$8.30 billion	2.69	$1.00 billion	$3.46	21.16
Eversource Energy	$13.15 billion	2.06	$811.65 million	$3.65	20.02

CMS Energy has higher earnings, but lower revenue than Eversource Energy. Eversource Energy is trading at a lower price-to-earnings ratio than CMS Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CMS Energy and Eversource Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CMS Energy	12.76%	12.07%	2.87%
Eversource Energy	10.22%	11.19%	2.85%

Insider and Institutional Ownership

93.6% of CMS Energy shares are held by institutional investors. Comparatively, 80.0% of Eversource Energy shares are held by institutional investors. 0.4% of CMS Energy shares are held by company insiders. Comparatively, 0.4% of Eversource Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

CMS Energy has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for CMS Energy and Eversource Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CMS Energy	0	5	8	0	2.62
Eversource Energy	3	6	4	0	2.08

CMS Energy presently has a consensus target price of $78.36, indicating a potential upside of 7.05%. Eversource Energy has a consensus target price of $72.70, indicating a potential downside of 0.51%. Given CMS Energy’s stronger consensus rating and higher probable upside, analysts plainly believe CMS Energy is more favorable than Eversource Energy.

Summary

CMS Energy beats Eversource Energy on 12 of the 17 factors compared between the two stocks.

About CMS Energy

CMS Energy Corporation operates as an energy company primarily in Michigan. The company operates through three segments: Electric Utility; Gas Utility; and Enterprises. The Electric Utility segment is involved in the generation, purchase, transmission, distribution, and sale of electricity. This segment generates electricity through coal, wind, gas, renewable energy, oil, and nuclear sources. Its distribution system comprises 208 miles of high-voltage distribution overhead lines; 4 miles of high-voltage distribution underground lines; 4,428 miles of high-voltage distribution overhead lines; 19 miles of high-voltage distribution underground lines; 82,474 miles of electric distribution overhead lines; 9,395 miles of underground distribution lines; 1,093 substations; and 3 battery facilities. The Gas Utility segment engages in the purchase, transmission, storage, distribution, and sale of natural gas, which includes 2,392 miles of transmission lines; 15 gas storage fields; 28,065 miles of distribution mains; and 8 compressor stations. The Enterprises segment is involved in the independent power production and marketing, including the development and operation of renewable generation. It serves 1.9 million electric and 1.8 million gas customers, including residential, commercial, and diversified industrial customers. The company was incorporated in 1987 and is headquartered in Jackson, Michigan.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.