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 5 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. While showing a medium growth rate, WEC is valued expensive at the moment.
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.
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
Looking at the Return On Assets, with a value of 3.22%, WEC belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
WEC has a Return On Equity of 12.29%. This is amongst the best in the industry. WEC outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.32%, WEC belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
WEC had an Average Return On Invested Capital over the past 3 years of 4.35%. This is in line with the industry average of 3.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.22% | ||
| ROE | 12.29% | ||
| ROIC | 4.32% |
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
Looking at the Profit Margin, with a value of 17.76%, WEC belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
In the last couple of years the Profit Margin of WEC has grown nicely.
Looking at the Operating Margin, with a value of 25.17%, WEC belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
In the last couple of years the Operating Margin of WEC has grown nicely.
WEC's Gross Margin of 69.12% is in line compared to the rest of the industry. WEC outperforms 52.00% of its industry peers.
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 | 25.17% | ||
| PM (TTM) | 17.76% | ||
| GM | 69.12% |
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.
The number of shares outstanding for WEC has been increased compared to 1 year ago.
The number of shares outstanding for WEC has been increased compared to 5 years ago.
The debt/assets ratio for WEC is higher compared to a year ago.
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.
Looking at the Altman-Z score, with a value of 1.12, WEC belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
WEC has a debt to FCF ratio of 61.47. This is a negative value and a sign of low solvency as WEC would need 61.47 years to pay back of all of its debts.
WEC has a Debt to FCF ratio of 61.47. This is amongst the best in the industry. WEC outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 1.50 is on the high side and indicates that WEC has dependencies on debt financing.
WEC's Debt to Equity ratio of 1.50 is in line compared to the rest of the industry. WEC outperforms 48.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.5 | ||
| Debt/FCF | 61.47 | ||
| Altman-Z | 1.12 |
ROIC/WACC0.62
WACC7%
2.3 Liquidity
A Current Ratio of 0.60 indicates that WEC may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.60, WEC is doing worse than 80.00% of the companies in the same industry.
A Quick Ratio of 0.43 indicates that WEC may have some problems paying its short term obligations.
WEC has a Quick ratio of 0.43. This is amonst the worse of the industry: WEC underperforms 88.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.62% 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 decrease in Revenue. The Revenue has decreased by -3.30% in the last year.
The Revenue has been growing slightly by 2.71% on average over the past years.
EPS 1Y (TTM)5.62%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%30%
Revenue 1Y (TTM)-3.3%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
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 7.34% on average per year.
The Revenue is expected to grow by 5.51% on average over the next years.
EPS Next Y8.17%
EPS Next 2Y7.54%
EPS Next 3Y7.34%
EPS Next 5Y7.34%
Revenue Next Year3.23%
Revenue Next 2Y4.26%
Revenue Next 3Y4.81%
Revenue Next 5Y5.51%
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 22.21.
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.
WEC is valuated rather cheaply when we compare the Price/Earnings ratio to 28.22, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.54 indicates a rather expensive valuation of WEC.
88.00% of the companies in the same industry are cheaper than WEC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.86. WEC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.21 | ||
| Fwd PE | 20.54 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WEC indicates a rather expensive valuation: WEC more expensive than 88.00% of the companies listed in the same industry.
WEC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. WEC is cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 104.81 | ||
| EV/EBITDA | 15.32 |
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)2.72
PEG (5Y)3.45
EPS Next 2Y7.54%
EPS Next 3Y7.34%
5. Dividend
5.1 Amount
WEC has a Yearly Dividend Yield of 3.28%.
Compared to an average industry Dividend Yield of 3.66, WEC has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, WEC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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
69.16% of the earnings are spent on dividend by WEC. 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.
DP69.16%
EPS Next 2Y7.54%
EPS Next 3Y7.34%
108.62
-0.17 (-0.16%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.18%
Inst Owner Change0.8%
Ins Owners0.15%
Ins Owner Change-0.75%
Market Cap34.66B
Analysts70
Price Target107.2 (-1.31%)
Short Float %3.83%
Short Ratio5.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend3.34
Dividend Growth(5Y)7.17%
DP69.16%
Div Incr Years21
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.62%
Min EPS beat(2)-0.36%
Max EPS beat(2)15.6%
EPS beat(4)3
Avg EPS beat(4)5.32%
Min EPS beat(4)-0.36%
Max EPS beat(4)15.6%
EPS beat(8)6
Avg EPS beat(8)4.76%
EPS beat(12)10
Avg EPS beat(12)5.52%
EPS beat(16)14
Avg EPS beat(16)6.41%
Revenue beat(2)0
Avg Revenue beat(2)-9.24%
Min Revenue beat(2)-13.9%
Max Revenue beat(2)-4.58%
Revenue beat(4)0
Avg Revenue beat(4)-8.38%
Min Revenue beat(4)-13.9%
Max Revenue beat(4)-4.58%
Revenue beat(8)1
Avg Revenue beat(8)-10.07%
Revenue beat(12)5
Avg Revenue beat(12)-1.37%
Revenue beat(16)9
Avg Revenue beat(16)1.96%
PT rev (1m)1.95%
PT rev (3m)4.43%
EPS NQ rev (1m)0.86%
EPS NQ rev (3m)28.44%
EPS NY rev (1m)0.13%
EPS NY rev (3m)0.24%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)7.79%
Revenue NY rev (1m)-0.52%
Revenue NY rev (3m)-1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.21 | ||
| Fwd PE | 20.54 | ||
| P/S | 4.03 | ||
| P/FCF | 104.81 | ||
| P/OCF | 10.79 | ||
| P/B | 2.79 | ||
| P/tB | 3.71 | ||
| EV/EBITDA | 15.32 |
EPS(TTM)4.89
EY4.5%
EPS(NY)5.29
Fwd EY4.87%
FCF(TTM)1.04
FCFY0.95%
OCF(TTM)10.07
OCFY9.27%
SpS26.95
BVpS38.94
TBVpS29.28
PEG (NY)2.72
PEG (5Y)3.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.22% | ||
| ROE | 12.29% | ||
| ROCE | 5.09% | ||
| ROIC | 4.32% | ||
| ROICexc | 4.32% | ||
| ROICexgc | 4.64% | ||
| OM | 25.17% | ||
| PM (TTM) | 17.76% | ||
| GM | 69.12% | ||
| FCFM | 3.85% |
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 Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.5 | ||
| Debt/FCF | 61.47 | ||
| Debt/EBITDA | 5.28 | ||
| Cap/Depr | 212.71% | ||
| Cap/Sales | 33.5% | ||
| Interest Coverage | 2.76 | ||
| Cash Conversion | 91.26% | ||
| Profit Quality | 21.65% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | 1.12 |
F-Score6
WACC7%
ROIC/WACC0.62
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)5.62%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%30%
EPS Next Y8.17%
EPS Next 2Y7.54%
EPS Next 3Y7.34%
EPS Next 5Y7.34%
Revenue 1Y (TTM)-3.3%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%3.01%
Revenue Next Year3.23%
Revenue Next 2Y4.26%
Revenue Next 3Y4.81%
Revenue Next 5Y5.51%
EBIT growth 1Y3.74%
EBIT growth 3Y8.08%
EBIT growth 5Y7.02%
EBIT Next Year73.63%
EBIT Next 3Y27.4%
EBIT Next 5Y19.66%
FCF growth 1Y15.47%
FCF growth 3YN/A
FCF growth 5Y31.31%
OCF growth 1Y6.41%
OCF growth 3Y16.47%
OCF growth 5Y6.49%