WEC ENERGY GROUP INC (WEC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WEC - US92939U1060 - Common Stock
110.41 USD
+0.37 (+0.34%)
110.41 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to WEC. WEC was compared to 26 industry peers in the Multi-Utilities industry. WEC has an excellent profitability rating, but there are concerns on its financial health. WEC is valied quite expensively at the moment, while it does show a decent growth rate. Finally WEC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- WEC had positive earnings in the past year.
- WEC had a positive operating cash flow in the past year.
- In the past 5 years WEC has always been profitable.
- WEC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.40%, WEC belongs to the top of the industry, outperforming 96.15% of the companies in the same industry.
- With an excellent Return On Equity value of 12.46%, WEC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 4.53%, WEC belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for WEC is in line with the industry average of 3.94%.
- The 3 year average ROIC (4.35%) for WEC is below the current ROIC(4.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.4% | ||
| ROE | 12.46% | ||
| ROIC | 4.53% |
ROA(3y)3.21%
ROA(5y)3.24%
ROE(3y)11.99%
ROE(5y)11.85%
ROIC(3y)4.35%
ROIC(5y)4.27%
1.3 Margins
- With an excellent Profit Margin value of 17.75%, WEC belongs to the best of the industry, outperforming 96.15% of the companies in the same industry.
- WEC's Profit Margin has improved in the last couple of years.
- WEC has a Operating Margin of 25.09%. This is amongst the best in the industry. WEC outperforms 88.46% of its industry peers.
- WEC's Operating Margin has improved in the last couple of years.
- WEC has a Gross Margin (67.71%) which is in line with its industry peers.
- WEC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.09% | ||
| PM (TTM) | 17.75% | ||
| GM | 67.71% |
OM growth 3Y6.87%
OM growth 5Y4.19%
PM growth 3Y4.33%
PM growth 5Y3.33%
GM growth 3Y4.72%
GM growth 5Y1.38%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WEC is destroying value.
- Compared to 1 year ago, WEC has more shares outstanding
- Compared to 5 years ago, WEC has more shares outstanding
- WEC has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.12, we must say that WEC is in the distress zone and has some risk of bankruptcy.
- WEC has a better Altman-Z score (1.12) than 84.62% of its industry peers.
- WEC has a Debt/Equity ratio of 1.42. This is a high value indicating a heavy dependency on external financing.
- WEC has a Debt to Equity ratio (1.42) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.12 |
ROIC/WACC0.65
WACC6.99%
2.3 Liquidity
- A Current Ratio of 0.50 indicates that WEC may have some problems paying its short term obligations.
- The Current ratio of WEC (0.50) is worse than 96.15% of its industry peers.
- WEC has a Quick Ratio of 0.50. This is a bad value and indicates that WEC is not financially healthy enough and could expect problems in meeting its short term obligations.
- WEC has a worse Quick ratio (0.33) than 96.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 16.01% over the past year.
- The Earnings Per Share has been growing slightly by 6.44% on average over the past years.
- Looking at the last year, WEC shows a quite strong growth in Revenue. The Revenue has grown by 11.88% in the last year.
- WEC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.71% yearly.
EPS 1Y (TTM)16.01%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%1.22%
Revenue 1Y (TTM)11.88%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%12.91%
3.2 Future
- WEC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.68% yearly.
- WEC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.34% yearly.
EPS Next Y8.2%
EPS Next 2Y7.52%
EPS Next 3Y7.48%
EPS Next 5Y7.68%
Revenue Next Year4.15%
Revenue Next 2Y5%
Revenue Next 3Y5.85%
Revenue Next 5Y6.34%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- WEC is valuated rather expensively with a Price/Earnings ratio of 20.87.
- 80.77% of the companies in the same industry are cheaper than WEC, based on the Price/Earnings ratio.
- WEC is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 19.53, which indicates a rather expensive current valuation of WEC.
- WEC's Price/Forward Earnings ratio is rather expensive when compared to the industry. WEC is more expensive than 80.77% of the companies in the same industry.
- WEC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.87 | ||
| Fwd PE | 19.53 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, WEC is valued more expensive than 88.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.49 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of WEC may justify a higher PE ratio.
PEG (NY)2.55
PEG (5Y)3.24
EPS Next 2Y7.52%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
- WEC has a Yearly Dividend Yield of 3.48%.
- WEC's Dividend Yield is a higher than the industry average which is at 3.77.
- Compared to an average S&P500 Dividend Yield of 1.82, WEC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
5.2 History
- The dividend of WEC is nicely growing with an annual growth rate of 7.17%!
- WEC has been paying a dividend for at least 10 years, so it has a reliable track record.
- WEC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.17%
Div Incr Years21
Div Non Decr Years23
5.3 Sustainability
- WEC pays out 66.24% of its income as dividend. This is not a sustainable payout ratio.
- WEC's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP66.24%
EPS Next 2Y7.52%
EPS Next 3Y7.48%
WEC ENERGY GROUP INC / WEC FAQ
What is the ChartMill fundamental rating of WEC ENERGY GROUP INC (WEC) stock?
ChartMill assigns a fundamental rating of 4 / 10 to WEC.
What is the valuation status for WEC stock?
ChartMill assigns a valuation rating of 2 / 10 to WEC ENERGY GROUP INC (WEC). This can be considered as Overvalued.
How profitable is WEC ENERGY GROUP INC (WEC) stock?
WEC ENERGY GROUP INC (WEC) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for WEC stock?
The Price/Earnings (PE) ratio for WEC ENERGY GROUP INC (WEC) is 20.87 and the Price/Book (PB) ratio is 2.64.
Is the dividend of WEC ENERGY GROUP INC sustainable?
The dividend rating of WEC ENERGY GROUP INC (WEC) is 7 / 10 and the dividend payout ratio is 66.24%.