Head to Head Analysis: Vistra (NYSE:VST) & CMS Energy (NYSE:CMS)

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

Insider and Institutional Ownership

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

Dividends

Vistra pays an annual dividend of $0.91 per share and has a dividend yield of 0.5%. CMS Energy pays an annual dividend of $2.28 per share and has a dividend yield of 3.0%. Vistra pays out 32.9% of its earnings in the form of a dividend. CMS Energy pays out 64.6% 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. Vistra has raised its dividend for 6 consecutive years and CMS Energy has raised its dividend for 3 consecutive years.

Volatility and Risk

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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vistra and CMS Energy, as reported by MarketBeat.

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

Vistra presently has a consensus target price of $236.73, indicating a potential upside of 38.28%. CMS Energy has a consensus target price of $78.69, indicating a potential upside of 3.75%. Given Vistra’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Vistra is more favorable than CMS Energy.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vistra	$17.22 billion	3.37	$2.66 billion	$2.77	61.81
CMS Energy	$8.54 billion	2.72	$1.07 billion	$3.53	21.49

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.

Summary

Vistra beats CMS Energy on 14 of the 18 factors compared between the two stocks.

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.

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.