CMS Energy Corp. (CMS) announced that its board of directors has approved an increase in the quarterly dividend rate by 7.4%. The quarterly dividend will be 29 cents, up from the prior payout of 27 cents. The raised dividend will be paid on Feb 27, 2015, to shareholders of record as of Feb 6, 2015.
CMS Energy has not only been consistently paying out dividends but has also increased the rate for the last nine years. In Jan 2014, CMS Energy had raised its quarterly dividend by 6% sequentially to 27 cents. The latest hike will take the company’s dividend yield to 3.13%, higher than the industry average of 2.79%.
The company exited the third quarter of 2014 with net cash from operating activities of $962 million. The ample cash should easily fund the incremental dividend payment.
CMS Energy’s capital investments and strong performance allow it to boost shareholder value. Apart from hiking dividends, the company also aims to achieve annual earnings growth in the range of 5% to 7% over the long term.
Another utility operator Consolidated Edison (ED) recently increased its quarterly cash dividend by 3.1% to 65 cents on Jan 15, 2015. This has resulted in an annual dividend increase of 8 cents to $2.60 per share.
CMS Energy currently has a Zacks Rank #2 (Buy). Other well-ranked stocks in the utility space include Huaneng Power International, Inc. (HNP) and Brookfield Infrastructure Partners L.P. (BIP). Huaneng Power International sports a Zacks Rank #1 (Strong Buy) while Brookfield Infrastructure Partners shares the same rank as CMS Energy.
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