WEC ENERGY GROUP INC (WEC) Stock Fundamental Analysis
NYSE:WEC - New York Stock Exchange, Inc. - US92939U1060 - Common Stock
We assign a fundamental rating of 5 out of 10 to WEC. WEC was compared to 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 quite expensive at the moment. 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.
WEC had positive earnings in each of the past 5 years.
Each year in the past 5 years WEC had a positive operating cash flow.
1.2 Ratios
WEC has a Return On Assets (2.86%) which is in line with 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 has a better Return On Invested Capital (4.19%) than 80.00% 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.
WEC's Profit Margin has improved in the last couple of years.
WEC's Operating Margin of 24.40% is amongst the best of the industry. WEC outperforms 84.00% of its industry peers.
WEC's Operating Margin has improved in the last couple of years.
WEC's Gross Margin of 68.61% is in line compared to the rest of the industry. WEC outperforms 52.00% of its industry peers.
WEC's Gross Margin has been stable in the last couple of years.
| 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
WEC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for WEC remains at a similar level compared to 1 year ago.
Compared to 5 years ago, WEC has about the same amount of 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 1.12. This is a bad value and indicates that WEC is not financially healthy and even has some risk of bankruptcy.
WEC has a Altman-Z score of 1.12. This is amongst the best in the industry. WEC outperforms 92.00% of its industry peers.
WEC has a debt to FCF ratio of 61.50. This is a negative value and a sign of low solvency as WEC would need 61.50 years to pay back of all of its debts.
WEC has a better Debt to FCF ratio (61.50) than 96.00% of its industry peers.
A Debt/Equity ratio of 1.44 is on the high side and indicates that WEC has dependencies on debt financing.
The Debt to Equity ratio of WEC (1.44) is better than 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 61.5 | ||
| Altman-Z | 1.12 |
ROIC/WACC0.6
WACC7%
2.3 Liquidity
WEC has a Current 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.
WEC's Current ratio of 0.65 is on the low side compared to the rest of the industry. WEC is outperformed by 76.00% 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.
Looking at the Quick ratio, with a value of 0.46, WEC is doing worse than 84.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.31% over the past year.
WEC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.69% yearly.
WEC shows a decrease in Revenue. In the last year, the revenue decreased by -7.59%.
WEC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.98% yearly.
EPS 1Y (TTM)5.31%
EPS 3Y6.9%
EPS 5Y6.69%
EPS Q2Q%-18%
Revenue 1Y (TTM)-7.59%
Revenue growth 3Y7.09%
Revenue growth 5Y2.98%
Sales Q2Q%-4.8%
3.2 Future
The Earnings Per Share is expected to grow by 7.05% on average over the next years.
WEC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.87% yearly.
EPS Next Y6.1%
EPS Next 2Y6.76%
EPS Next 3Y6.81%
EPS Next 5Y7.05%
Revenue Next Year-4.15%
Revenue Next 2Y0.46%
Revenue Next 3Y1.83%
Revenue Next 5Y3.87%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 21.56.
WEC's Price/Earnings ratio is rather expensive when compared to the industry. WEC is more expensive than 80.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. WEC is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 18.63, the valuation of WEC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, WEC is valued a bit more expensive than the industry average as 76.00% of the companies are valued more cheaply.
WEC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.56 | ||
| Fwd PE | 18.63 |
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 | 99.05 | ||
| EV/EBITDA | 14.66 |
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.
WEC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.54
PEG (5Y)3.22
EPS Next 2Y6.76%
EPS Next 3Y6.81%
5. Dividend
5.1 Amount
WEC has a Yearly Dividend Yield of 3.63%.
Compared to an average industry Dividend Yield of 3.82, WEC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, WEC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.63% |
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
80.27% of the earnings are spent on dividend by WEC. This is not a sustainable payout ratio.
WEC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP80.27%
EPS Next 2Y6.76%
EPS Next 3Y6.81%
WEC ENERGY GROUP INC
NYSE:WEC (1/22/2025, 10:37:50 AM)
98.31
-1.92 (-1.92%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners78.82%
Inst Owner Change-0.06%
Ins Owners0.14%
Ins Owner Change-0.7%
Market Cap31.10B
Analysts67.83
Price Target102.64 (4.4%)
Short Float %3.14%
Short Ratio5.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.63% |
Yearly Dividend3.12
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)1.27%
PT rev (3m)8.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)28.7%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.92%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.56 | ||
| Fwd PE | 18.63 | ||
| P/S | 3.64 | ||
| P/FCF | 99.05 | ||
| P/OCF | 10 | ||
| P/B | 2.57 | ||
| P/tB | 3.44 | ||
| EV/EBITDA | 14.66 |
EPS(TTM)4.56
EY4.64%
EPS(NY)5.28
Fwd EY5.37%
FCF(TTM)0.99
FCFY1.01%
OCF(TTM)9.83
OCFY10%
SpS26.97
BVpS38.29
TBVpS28.55
PEG (NY)3.54
PEG (5Y)3.22
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 | 1.12 |
F-Score5
WACC7%
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)5.31%
EPS 3Y6.9%
EPS 5Y6.69%
EPS Q2Q%-18%
EPS Next Y6.1%
EPS Next 2Y6.76%
EPS Next 3Y6.81%
EPS Next 5Y7.05%
Revenue 1Y (TTM)-7.59%
Revenue growth 3Y7.09%
Revenue growth 5Y2.98%
Sales Q2Q%-4.8%
Revenue Next Year-4.15%
Revenue Next 2Y0.46%
Revenue Next 3Y1.83%
Revenue Next 5Y3.87%
EBIT growth 1Y6.94%
EBIT growth 3Y6.95%
EBIT growth 5Y7.91%
EBIT Next Year73.84%
EBIT Next 3Y28.31%
EBIT Next 5Y21.04%
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%