WEC ENERGY GROUP INC (WEC) Stock Fundamental Analysis
NYSE:WEC - New York Stock Exchange, Inc. - US92939U1060 - Common Stock - Currency: USD
WEC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 25 industry peers in the Multi-Utilities industry. While WEC belongs to the best of the industry regarding profitability, there are concerns on its financial health. WEC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WEC was profitable.
In the past year WEC had a positive cash flow from operations.
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
WEC has a better Return On Assets (3.38%) than 100.00% of its industry peers.
The Return On Equity of WEC (12.53%) is better than 84.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.56%, WEC belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WEC is in line with the industry average of 3.93%.
The last Return On Invested Capital (4.56%) for WEC is above the 3 year average (4.35%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.38% | ||
| ROE | 12.53% | ||
| ROIC | 4.56% |
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
WEC's Profit Margin of 17.96% is amongst the best of the industry. WEC outperforms 92.00% of its industry peers.
In the last couple of years the Profit Margin of WEC has grown nicely.
WEC's Operating Margin of 25.24% is amongst the best of the industry. WEC outperforms 88.00% of its industry peers.
WEC's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 68.08%, WEC perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
WEC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.24% | ||
| PM (TTM) | 17.96% | ||
| GM | 68.08% |
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
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
Compared to 1 year ago, WEC has a worse debt to assets ratio.
2.2 Solvency
WEC has an Altman-Z score of 1.08. This is a bad value and indicates that WEC is not financially healthy and even has some risk of bankruptcy.
WEC's Altman-Z score of 1.08 is amongst the best of the industry. WEC outperforms 84.00% of its industry peers.
The Debt to FCF ratio of WEC is 54.98, which is on the high side as it means it would take WEC, 54.98 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 54.98, WEC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
A Debt/Equity ratio of 1.37 is on the high side and indicates that WEC has dependencies on debt financing.
WEC has a Debt to Equity ratio (1.37) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.37 | ||
| Debt/FCF | 54.98 | ||
| Altman-Z | 1.08 |
ROIC/WACC0.65
WACC6.98%
2.3 Liquidity
A Current Ratio of 0.50 indicates that WEC may have some problems paying its short term obligations.
WEC's Current ratio of 0.50 is on the low side compared to the rest of the industry. WEC is outperformed by 96.00% of its industry peers.
A Quick Ratio of 0.40 indicates that WEC may have some problems paying its short term obligations.
WEC's Quick ratio of 0.40 is on the low side compared to the rest of the industry. WEC is outperformed by 96.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.4 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.01% over the past year.
WEC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.44% yearly.
Looking at the last year, WEC shows a small growth in Revenue. The Revenue has grown by 4.42% in the last year.
Measured over the past years, WEC shows a small growth in Revenue. The Revenue has been growing by 2.71% on average per year.
EPS 1Y (TTM)4.01%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%15.23%
Revenue 1Y (TTM)4.42%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%17.51%
3.2 Future
WEC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.38% yearly.
The Revenue is expected to grow by 5.60% on average over the next years.
EPS Next Y8.11%
EPS Next 2Y7.46%
EPS Next 3Y7.29%
EPS Next 5Y7.38%
Revenue Next Year3.26%
Revenue Next 2Y4.27%
Revenue Next 3Y4.85%
Revenue Next 5Y5.6%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WEC is valuated rather expensively with a Price/Earnings ratio of 19.97.
Compared to the rest of the industry, the Price/Earnings ratio of WEC indicates a slightly more expensive valuation: WEC is more expensive than 68.00% of the companies listed in the same industry.
WEC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
WEC is valuated rather expensively with a Price/Forward Earnings ratio of 18.36.
WEC's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WEC is more expensive than 76.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. WEC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.97 | ||
| Fwd PE | 18.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WEC is valued expensively inside the industry as 84.00% of the companies are valued cheaper.
WEC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. WEC is cheaper than 96.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 88.66 | ||
| EV/EBITDA | 14.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WEC does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of WEC may justify a higher PE ratio.
PEG (NY)2.46
PEG (5Y)3.1
EPS Next 2Y7.46%
EPS Next 3Y7.29%
5. Dividend
5.1 Amount
WEC has a Yearly Dividend Yield of 3.42%.
WEC's Dividend Yield is comparable with the industry average which is at 3.75.
Compared to an average S&P500 Dividend Yield of 2.37, WEC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.17%
Div Incr Years21
Div Non Decr Years23
5.3 Sustainability
66.07% of the earnings are spent on dividend by WEC. This is not a sustainable payout ratio.
The dividend of WEC is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP66.07%
EPS Next 2Y7.46%
EPS Next 3Y7.29%
103.66
-0.65 (-0.62%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.04%
Inst Owner Change0%
Ins Owners0.15%
Ins Owner Change-0.26%
Market Cap33.08B
Analysts69.52
Price Target111.93 (7.98%)
Short Float %3.63%
Short Ratio5.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend3.34
Dividend Growth(5Y)7.17%
DP66.07%
Div Incr Years21
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.39%
Min EPS beat(2)-0.36%
Max EPS beat(2)3.14%
EPS beat(4)3
Avg EPS beat(4)5.7%
Min EPS beat(4)-0.36%
Max EPS beat(4)15.6%
EPS beat(8)7
Avg EPS beat(8)5.15%
EPS beat(12)10
Avg EPS beat(12)5.27%
EPS beat(16)14
Avg EPS beat(16)6.09%
Revenue beat(2)1
Avg Revenue beat(2)-1.75%
Min Revenue beat(2)-13.9%
Max Revenue beat(2)10.39%
Revenue beat(4)1
Avg Revenue beat(4)-3.52%
Min Revenue beat(4)-13.9%
Max Revenue beat(4)10.39%
Revenue beat(8)1
Avg Revenue beat(8)-8.79%
Revenue beat(12)5
Avg Revenue beat(12)-0.96%
Revenue beat(16)9
Avg Revenue beat(16)1.73%
PT rev (1m)4.28%
PT rev (3m)5.78%
EPS NQ rev (1m)3.18%
EPS NQ rev (3m)-12.97%
EPS NY rev (1m)0%
EPS NY rev (3m)0.08%
Revenue NQ rev (1m)-1.1%
Revenue NQ rev (3m)-1.81%
Revenue NY rev (1m)-1.03%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.97 | ||
| Fwd PE | 18.36 | ||
| P/S | 3.65 | ||
| P/FCF | 88.66 | ||
| P/OCF | 9.42 | ||
| P/B | 2.54 | ||
| P/tB | 3.33 | ||
| EV/EBITDA | 14.22 |
EPS(TTM)5.19
EY5.01%
EPS(NY)5.65
Fwd EY5.45%
FCF(TTM)1.17
FCFY1.13%
OCF(TTM)11
OCFY10.61%
SpS28.42
BVpS40.76
TBVpS31.1
PEG (NY)2.46
PEG (5Y)3.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.38% | ||
| ROE | 12.53% | ||
| ROCE | 5.4% | ||
| ROIC | 4.56% | ||
| ROICexc | 4.57% | ||
| ROICexgc | 4.91% | ||
| OM | 25.24% | ||
| PM (TTM) | 17.96% | ||
| GM | 68.08% | ||
| FCFM | 4.11% |
ROA(3y)3.21%
ROA(5y)3.24%
ROE(3y)11.99%
ROE(5y)11.85%
ROIC(3y)4.35%
ROIC(5y)4.27%
ROICexc(3y)4.36%
ROICexc(5y)4.27%
ROICexgc(3y)4.71%
ROICexgc(5y)4.64%
ROCE(3y)5.21%
ROCE(5y)5.14%
ROICexcg growth 3Y1.98%
ROICexcg growth 5Y0.43%
ROICexc growth 3Y2.41%
ROICexc growth 5Y0.94%
OM growth 3Y6.87%
OM growth 5Y4.19%
PM growth 3Y4.33%
PM growth 5Y3.33%
GM growth 3Y4.72%
GM growth 5Y1.38%
F-Score6
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.37 | ||
| Debt/FCF | 54.98 | ||
| Debt/EBITDA | 4.85 | ||
| Cap/Depr | 227.21% | ||
| Cap/Sales | 34.6% | ||
| Interest Coverage | 3.01 | ||
| Cash Conversion | 95.66% | ||
| Profit Quality | 22.9% | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.4 | ||
| Altman-Z | 1.08 |
F-Score6
WACC6.98%
ROIC/WACC0.65
Cap/Depr(3y)212.24%
Cap/Depr(5y)215.17%
Cap/Sales(3y)29.51%
Cap/Sales(5y)29.31%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.01%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%15.23%
EPS Next Y8.11%
EPS Next 2Y7.46%
EPS Next 3Y7.29%
EPS Next 5Y7.38%
Revenue 1Y (TTM)4.42%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%17.51%
Revenue Next Year3.26%
Revenue Next 2Y4.27%
Revenue Next 3Y4.85%
Revenue Next 5Y5.6%
EBIT growth 1Y2.6%
EBIT growth 3Y8.08%
EBIT growth 5Y7.02%
EBIT Next Year72.32%
EBIT Next 3Y26.83%
EBIT Next 5Y20.38%
FCF growth 1Y155.69%
FCF growth 3YN/A
FCF growth 5Y31.31%
OCF growth 1Y97.24%
OCF growth 3Y16.47%
OCF growth 5Y6.49%