CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078 (CMSA)

FairStock Score: 43/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach this as a bond-like utility obligation, not a common stock. CMS Energy is a slow-growing utility, and these notes sit low in the capital structure, so my first question is whether the underlying earnings can carry the 5.625% coupon. The filed record is decent: in fiscal 2023, the year ended 2023-12-31, revenue was $7.3B, net income $887M, and diluted EPS $3.01. By fiscal 2025, the year ended 2025-12-31, revenue reached $8.3B, net income $1.1B, and diluted EPS $3.53. That is steady, if unspectacular, progress, and FairStock's Lynch category calls it a slow grower on 7.2% profit growth and 5.9% revenue growth over five years. The utility model can provide a modest moat through stable demand, but it also limits upside. Recent results are mixed: fiscal Q1 2026, quarter ended 2026-03-31, showed revenue $2.7B, net income $340M, and EPS $1.10, but fiscal Q2 2026, quarter ended 2026-06-30, delivered revenue $1.8B, net income $120M, and EPS $0.37—down from fiscal Q2 2025's $201M and $0.66 on the same revenue. FairStock's P/E is 10.55 at the 2026-10-13 close of $19.02, which is not demanding if earnings normalize. Yet the FairStock Score is only 43/100, and the price is near the 52-week low of $18.61. For a junior subordinated note due 2078, duration and credit risk matter. I would want more evidence that the Q2 2026 softness is temporary and that the utility's cash flows comfortably cover its obligations before calling this a compelling value.

In plain English: CMS Energy is a utility company, and this security is a junior subordinated note due 2078 that pays a 5.625% coupon. Its filed results show modest sales and profit growth over the last few years, but the most recent quarter was weaker than a year earlier. At $19.02, the price is near the low end of its 52-week range, so it looks reasonably priced or cheaper than its recent highs, though the business is not without risk.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer