CMS Energy (NYSE:CMS) vs. Vistra (NYSE:VST) Head-To-Head Review

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

Dividends

CMS Energy pays an annual dividend of $2.28 per share and has a dividend yield of 3.0%. Vistra pays an annual dividend of $0.91 per share and has a dividend yield of 0.5%. CMS Energy pays out 64.6% of its earnings in the form of a dividend. Vistra pays out 32.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CMS Energy has increased its dividend for 3 consecutive years and Vistra has increased its dividend for 6 consecutive years.

Valuation and Earnings

This table compares CMS Energy and Vistra”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CMS Energy	$8.54 billion	2.72	$1.07 billion	$3.53	21.48
Vistra	$17.22 billion	3.39	$2.66 billion	$2.77	62.23

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

Analyst Recommendations

This is a summary of current recommendations and price targets for CMS Energy and Vistra, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CMS Energy	0	6	8	0	2.57
Vistra	0	1	12	3	3.13

CMS Energy currently has a consensus price target of $78.31, suggesting a potential upside of 3.29%. Vistra has a consensus price target of $237.53, suggesting a potential upside of 37.80%. Given Vistra’s stronger consensus rating and higher probable upside, analysts clearly believe Vistra is more favorable than CMS Energy.

Insider and Institutional Ownership

93.6% of CMS Energy shares are owned by institutional investors. Comparatively, 90.9% of Vistra shares are owned by institutional investors. 0.4% of CMS Energy shares are owned by insiders. Comparatively, 1.4% of Vistra shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

CMS Energy has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Vistra has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CMS Energy	12.54%	12.09%	2.87%
Vistra	6.70%	64.04%	4.45%

Summary

Vistra beats CMS Energy on 14 of the 18 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 Vistra

Vistra Corp., together with its subsidiaries, operates as an integrated retail electricity and power generation company. The company operates through six segments: Retail, Texas, East, West, Sunset, and Asset Closure. It retails electricity and natural gas to residential, commercial, and industrial customers across states in the United States and the District of Columbia. In addition, the company is involved in the electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities. It serves approximately 4 million customers with a generation capacity of approximately 37,000 megawatts with a portfolio of natural gas, nuclear, coal, solar, and battery energy storage facilities. The company was formerly known as Vistra Energy Corp. and changed its name to Vistra Corp. in July 2020. Vistra Corp. was founded in 1882 and is based in Irving, Texas.