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For those looking to find strong Utilities stocks, it is prudent to search for companies in the group that are outperforming their peers. CMS Energy (CMS) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Utilities peers, we might be able to answer that question.
CMS Energy is one of 104 individual stocks in the Utilities sector. Collectively, these companies sit at #7 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. CMS Energy is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for CMS' full-year earnings has moved 0.3% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Based on the most recent data, CMS has returned 8.5% so far this year. Meanwhile, the Utilities sector has returned an average of 2.7% on a year-to-date basis. As we can see, CMS Energy is performing better than its sector in the calendar year.
One other Utilities stock that has outperformed the sector so far this year is Iberdrola S.A. (IBDRY). The stock is up 3.5% year-to-date.
In Iberdrola S.A.'s case, the consensus EPS estimate for the current year increased 3.3% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, CMS Energy is a member of the Utility - Electric Power industry, which includes 60 individual companies and currently sits at #138 in the Zacks Industry Rank. On average, stocks in this group have gained 3% this year, meaning that CMS is performing better in terms of year-to-date returns. Iberdrola S.A. is also part of the same industry.
CMS Energy and Iberdrola S.A. could continue their solid performance, so investors interested in Utilities stocks should continue to pay close attention to these stocks.
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