WEC ENERGY GROUP INC (WEC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WEC - US92939U1060 - Common Stock
109.91 USD
+0.21 (+0.19%)
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 quite expensive at the moment. 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.
- WEC had positive earnings in each of the past 5 years.
- In the past 5 years WEC always reported a positive cash flow from operatings.
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.
- WEC has a better Return On Equity (12.46%) than 100.00% of its industry peers.
- WEC's Return On Invested Capital of 4.53% is amongst the best of the industry. WEC outperforms 88.46% of its industry peers.
- 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 3.94%.
- The last Return On Invested Capital (4.53%) for WEC is above the 3 year average (4.35%), which is a sign of increasing profitability.
| 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
- WEC has a Profit Margin of 17.75%. This is amongst the best in the industry. WEC outperforms 96.15% of its industry peers.
- In the last couple of years the Profit Margin of WEC has grown nicely.
- The Operating Margin of WEC (25.09%) is better than 88.46% of its industry peers.
- WEC's Operating Margin has improved in the last couple of years.
- WEC has a Gross Margin of 67.71%. This is comparable to the rest of the industry: WEC outperforms 53.85% of 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.
- 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.
- Compared to 1 year ago, WEC has a worse debt to assets ratio.
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 84.62% of the companies in the same industry.
- 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 of 1.42. This is comparable to the rest of the industry: WEC outperforms 57.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.12 |
ROIC/WACC0.65
WACC6.97%
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.
- With a Quick ratio value of 0.33, WEC is not doing good in the industry: 96.15% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
- WEC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.01%, which is quite good.
- 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.
- The Revenue has grown by 11.88% in the past year. This is quite good.
- The Revenue has been growing slightly by 2.71% on average over the past years.
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
- Based on estimates for the next years, WEC will show a small growth in Earnings Per Share. The EPS will grow by 7.68% on average per year.
- Based on estimates for the next years, WEC will show a small growth in Revenue. The Revenue will grow by 6.34% on average per year.
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
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- 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
- The Price/Earnings ratio is 20.78, which indicates a rather expensive current valuation of WEC.
- Based on the Price/Earnings ratio, WEC is valued expensively inside the industry as 80.77% of the companies are valued cheaper.
- When comparing the Price/Earnings ratio of WEC to the average of the S&P500 Index (27.25), we can say WEC is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 19.44, WEC is valued on the expensive side.
- Based on the Price/Forward Earnings ratio, WEC is valued more expensive than 80.77% of the companies in the same industry.
- WEC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.78 | ||
| Fwd PE | 19.44 |
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 88.46% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.46 |
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)2.53
PEG (5Y)3.23
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
- On average, the dividend of WEC grows each year by 7.17%, which is quite nice.
- WEC has paid a dividend for at least 10 years, which is 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
- 66.24% 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.
DP66.24%
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 20.78 and the Price/Book (PB) ratio is 2.63.
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%.