WEC ENERGY GROUP INC (WEC) Stock Fundamental Analysis
NYSE:WEC - New York Stock Exchange, Inc. - US92939U1060 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to WEC. WEC was compared to 25 industry peers in the Multi-Utilities industry. While WEC has a great profitability rating, there are quite some concerns on its financial health. WEC does not seem to be growing, but still is valued expensively. WEC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year WEC was profitable.
WEC had a positive operating cash flow in the past year.
Of the past 5 years WEC 4 years were profitable.
In the past 5 years WEC always reported a positive cash flow from operatings.
1.2 Ratios
WEC's Return On Assets of 2.86% is fine compared to the rest of the industry. WEC outperforms 68.00% of its industry peers.
With a decent Return On Equity value of 10.67%, WEC is doing good in the industry, outperforming 64.00% of the companies in the same industry.
WEC's Return On Invested Capital of 4.19% is fine compared to the rest of the industry. WEC outperforms 68.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WEC is in line with the industry average of 3.68%.
The last Return On Invested Capital (4.19%) for WEC is above the 3 year average (4.11%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.86% | ||
| ROE | 10.67% | ||
| ROIC | 4.19% |
ROA(3y)3.24%
ROA(5y)3.24%
ROE(3y)11.85%
ROE(5y)11.63%
ROIC(3y)4.11%
ROIC(5y)4.09%
1.3 Margins
WEC's Profit Margin of 15.14% is fine compared to the rest of the industry. WEC outperforms 76.00% of its industry peers.
In the last couple of years the Profit Margin of WEC has grown nicely.
With an excellent Operating Margin value of 24.40%, WEC belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
WEC's Operating Margin has improved in the last couple of years.
WEC has a Gross Margin (68.61%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of WEC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.4% | ||
| PM (TTM) | 15.14% | ||
| GM | 68.61% |
OM growth 3Y-0.13%
OM growth 5Y4.79%
PM growth 3Y-3.32%
PM growth 5Y1.66%
GM growth 3Y-1.93%
GM growth 5Y0.77%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WEC is destroying value.
WEC has more shares outstanding than it did 1 year ago.
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 1.14, we must say that WEC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.14, WEC belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
The Debt to FCF ratio of WEC is 61.50, which is on the high side as it means it would take WEC, 61.50 years of fcf income to pay off all of its debts.
WEC has a Debt to FCF ratio of 61.50. This is amongst the best in the industry. WEC outperforms 96.00% of its industry peers.
WEC has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
WEC's Debt to Equity ratio of 1.44 is fine compared to the rest of the industry. WEC outperforms 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 61.5 | ||
| Altman-Z | 1.14 |
ROIC/WACC0.6
WACC6.93%
2.3 Liquidity
A Current Ratio of 0.65 indicates that WEC may have some problems paying its short term obligations.
WEC has a worse Current ratio (0.65) than 80.00% of its industry peers.
WEC has a Quick Ratio of 0.65. This is a bad value and indicates that WEC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of WEC (0.46) is worse than 84.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
WEC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.62%.
Measured over the past 5 years, WEC shows a small growth in Earnings Per Share. The EPS has been growing by 6.44% on average per year.
EPS 1Y (TTM)5.62%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%30%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%3.01%
3.2 Future
Based on estimates for the next years, WEC will show a small growth in Earnings Per Share. The EPS will grow by 7.20% on average per year.
The Revenue is expected to grow by 5.75% on average over the next years.
EPS Next Y8.1%
EPS Next 2Y7.46%
EPS Next 3Y7.22%
EPS Next 5Y7.2%
Revenue Next Year4.97%
Revenue Next 2Y4.89%
Revenue Next 3Y4.55%
Revenue Next 5Y5.75%
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.
4. Valuation
4.1 Price/Earnings Ratio
WEC is valuated rather expensively with a Price/Earnings ratio of 21.28.
76.00% of the companies in the same industry are cheaper than WEC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.63, WEC is valued a bit cheaper.
With a Price/Forward Earnings ratio of 19.68, WEC is valued on the expensive side.
WEC's Price/Forward Earnings ratio is rather expensive when compared to the industry. WEC is more expensive than 80.00% of the companies in the same industry.
WEC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 19.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WEC is valued more expensive than 84.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WEC is valued cheaper than 96.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 105.27 | ||
| EV/EBITDA | 15.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WEC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.63
PEG (5Y)3.31
EPS Next 2Y7.46%
EPS Next 3Y7.22%
5. Dividend
5.1 Amount
WEC has a Yearly Dividend Yield of 3.45%. Purely for dividend investing, there may be better candidates out there.
WEC's Dividend Yield is a higher than the industry average which is at 3.78.
WEC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
5.2 History
On average, the dividend of WEC grows each year by 7.17%, which is quite nice.
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 80.27% 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.
DP80.27%
EPS Next 2Y7.46%
EPS Next 3Y7.22%
104.05
+0.52 (+0.5%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.18%
Inst Owner Change-5.76%
Ins Owners0.15%
Ins Owner Change-0.55%
Market Cap33.05B
Analysts69.09
Price Target104.48 (0.41%)
Short Float %3.57%
Short Ratio5.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
Yearly Dividend3.34
Dividend Growth(5Y)7.17%
DP80.27%
Div Incr Years21
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10%
Min EPS beat(2)4.4%
Max EPS beat(2)15.6%
EPS beat(4)4
Avg EPS beat(4)5.53%
Min EPS beat(4)0.49%
Max EPS beat(4)15.6%
EPS beat(8)7
Avg EPS beat(8)5.57%
EPS beat(12)11
Avg EPS beat(12)5.89%
EPS beat(16)15
Avg EPS beat(16)6.6%
Revenue beat(2)0
Avg Revenue beat(2)-5.29%
Min Revenue beat(2)-5.99%
Max Revenue beat(2)-4.58%
Revenue beat(4)0
Avg Revenue beat(4)-11.4%
Min Revenue beat(4)-26.01%
Max Revenue beat(4)-4.58%
Revenue beat(8)2
Avg Revenue beat(8)-4.33%
Revenue beat(12)6
Avg Revenue beat(12)2.04%
Revenue beat(16)9
Avg Revenue beat(16)2.23%
PT rev (1m)1.08%
PT rev (3m)5.67%
EPS NQ rev (1m)-4.48%
EPS NQ rev (3m)-4.86%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)-0.19%
Revenue NQ rev (1m)-0.52%
Revenue NQ rev (3m)-0.52%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 19.68 | ||
| P/S | 3.87 | ||
| P/FCF | 105.27 | ||
| P/OCF | 10.63 | ||
| P/B | 2.73 | ||
| P/tB | 3.66 | ||
| EV/EBITDA | 15.01 |
EPS(TTM)4.89
EY4.7%
EPS(NY)5.29
Fwd EY5.08%
FCF(TTM)0.99
FCFY0.95%
OCF(TTM)9.79
OCFY9.41%
SpS26.86
BVpS38.13
TBVpS28.43
PEG (NY)2.63
PEG (5Y)3.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.86% | ||
| ROE | 10.67% | ||
| ROCE | 5.06% | ||
| ROIC | 4.19% | ||
| ROICexc | 4.22% | ||
| ROICexgc | 4.56% | ||
| OM | 24.4% | ||
| PM (TTM) | 15.14% | ||
| GM | 68.61% | ||
| FCFM | 3.68% |
ROA(3y)3.24%
ROA(5y)3.24%
ROE(3y)11.85%
ROE(5y)11.63%
ROIC(3y)4.11%
ROIC(5y)4.09%
ROICexc(3y)4.11%
ROICexc(5y)4.09%
ROICexgc(3y)4.46%
ROICexgc(5y)4.46%
ROCE(3y)5.14%
ROCE(5y)5.09%
ROICexcg growth 3Y0.79%
ROICexcg growth 5Y1.99%
ROICexc growth 3Y1.26%
ROICexc growth 5Y2.47%
OM growth 3Y-0.13%
OM growth 5Y4.79%
PM growth 3Y-3.32%
PM growth 5Y1.66%
GM growth 3Y-1.93%
GM growth 5Y0.77%
F-Score5
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 61.5 | ||
| Debt/EBITDA | 5.12 | ||
| Cap/Depr | 209.44% | ||
| Cap/Sales | 32.77% | ||
| Interest Coverage | 2.76 | ||
| Cash Conversion | 91.01% | ||
| Profit Quality | 24.3% | ||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.46 | ||
| Altman-Z | 1.14 |
F-Score5
WACC6.93%
ROIC/WACC0.6
Cap/Depr(3y)211.24%
Cap/Depr(5y)221.44%
Cap/Sales(3y)27.38%
Cap/Sales(5y)28.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)5.62%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%30%
EPS Next Y8.1%
EPS Next 2Y7.46%
EPS Next 3Y7.22%
EPS Next 5Y7.2%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%3.01%
Revenue Next Year4.97%
Revenue Next 2Y4.89%
Revenue Next 3Y4.55%
Revenue Next 5Y5.75%
EBIT growth 1Y6.94%
EBIT growth 3Y6.95%
EBIT growth 5Y7.91%
EBIT Next Year72.77%
EBIT Next 3Y28.07%
EBIT Next 5Y19.89%
FCF growth 1Y230.78%
FCF growth 3YN/A
FCF growth 5Y-2.78%
OCF growth 1Y49.12%
OCF growth 3Y11.19%
OCF growth 5Y4.3%