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. WEC scores excellent on profitability, but there are concerns on its financial health. WEC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
WEC had positive earnings in the past year.
In the past year WEC had a positive cash flow from operations.
In the past 5 years WEC has always been profitable.
Each year in the past 5 years WEC had a positive operating cash flow.
1.2 Ratios
WEC's Return On Assets of 3.43% is amongst the best of the industry. WEC outperforms 96.00% of its industry peers.
With an excellent Return On Equity value of 12.55%, WEC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 4.54%, WEC belongs to the best of the industry, outperforming 88.00% 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 3.89%.
The 3 year average ROIC (4.35%) for WEC is below the current ROIC(4.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.43% | ||
| ROE | 12.55% | ||
| ROIC | 4.54% |
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 17.87% is amongst the best of the industry. WEC outperforms 92.00% of its industry peers.
WEC's Profit Margin has improved in the last couple of years.
The Operating Margin of WEC (25.03%) is better than 88.00% of its industry peers.
In the last couple of years the Operating Margin of WEC has grown nicely.
With a Gross Margin value of 67.81%, 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 | 25.03% | ||
| PM (TTM) | 17.87% | ||
| GM | 67.81% |
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
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 has been increased compared to 1 year ago.
WEC has more shares outstanding than it did 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 1.14, we must say that WEC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WEC (1.14) is better than 84.00% of its industry peers.
The Debt to FCF ratio of WEC is 135.35, which is on the high side as it means it would take WEC, 135.35 years of fcf income to pay off all of its debts.
WEC's Debt to FCF ratio of 135.35 is amongst the best of the industry. WEC outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 1.38 is on the high side and indicates that WEC has dependencies on debt financing.
WEC has a Debt to Equity ratio (1.38) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | 135.35 | ||
| Altman-Z | 1.14 |
ROIC/WACC0.65
WACC6.98%
2.3 Liquidity
A Current Ratio of 0.55 indicates that WEC may have some problems paying its short term obligations.
WEC's Current ratio of 0.55 is on the low side compared to the rest of the industry. WEC is outperformed by 92.00% of its industry peers.
WEC has a Quick Ratio of 0.55. 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 (0.40) is worse than 96.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.4 |
3. Growth
3.1 Past
WEC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.39%, which is quite good.
The Earnings Per Share has been growing slightly by 6.44% on average over the past years.
WEC shows a small growth in Revenue. In the last year, the Revenue has grown by 7.88%.
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)11.39%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%13.43%
Revenue 1Y (TTM)7.88%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%13.4%
3.2 Future
The Earnings Per Share is expected to grow by 7.38% on average over the next years.
The Revenue is expected to grow by 5.60% on average over the next years.
EPS Next Y8.06%
EPS Next 2Y7.38%
EPS Next 3Y7.25%
EPS Next 5Y7.38%
Revenue Next Year2.96%
Revenue Next 2Y4.11%
Revenue Next 3Y4.71%
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 20.90.
WEC's Price/Earnings ratio is a bit more expensive when compared to the industry. WEC is more expensive than 68.00% of the companies in the same industry.
WEC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.48.
With a Price/Forward Earnings ratio of 19.57, WEC is valued on the expensive side.
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.
When comparing the Price/Forward Earnings ratio of WEC to the average of the S&P500 Index (34.04), we can say WEC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.9 | ||
| Fwd PE | 19.57 |
4.2 Price Multiples
84.00% of the companies in the same industry are cheaper than WEC, based on the Enterprise Value to EBITDA ratio.
96.00% of the companies in the same industry are more expensive than WEC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 232.14 | ||
| EV/EBITDA | 14.67 |
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)2.59
PEG (5Y)3.25
EPS Next 2Y7.38%
EPS Next 3Y7.25%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.25%, WEC has a reasonable but not impressive dividend return.
WEC's Dividend Yield is a higher than the industry average which is at 3.56.
WEC's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
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
WEC pays out 66.00% of its income as dividend. 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%
EPS Next 2Y7.38%
EPS Next 3Y7.25%
110.35
-0.35 (-0.32%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners82.32%
Inst Owner Change-0.72%
Ins Owners0.15%
Ins Owner Change-0.26%
Market Cap35.22B
Analysts68.57
Price Target112.74 (2.17%)
Short Float %3.7%
Short Ratio5.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
Yearly Dividend3.34
Dividend Growth(5Y)7.17%
DP66%
Div Incr Years21
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5%
Min EPS beat(2)3.14%
Max EPS beat(2)6.86%
EPS beat(4)3
Avg EPS beat(4)6.31%
Min EPS beat(4)-0.36%
Max EPS beat(4)15.6%
EPS beat(8)7
Avg EPS beat(8)5.06%
EPS beat(12)10
Avg EPS beat(12)5.36%
EPS beat(16)14
Avg EPS beat(16)5.96%
Revenue beat(2)2
Avg Revenue beat(2)11.71%
Min Revenue beat(2)10.39%
Max Revenue beat(2)13.02%
Revenue beat(4)2
Avg Revenue beat(4)1.23%
Min Revenue beat(4)-13.9%
Max Revenue beat(4)13.02%
Revenue beat(8)2
Avg Revenue beat(8)-5.09%
Revenue beat(12)5
Avg Revenue beat(12)-1.39%
Revenue beat(16)9
Avg Revenue beat(16)2.29%
PT rev (1m)0.72%
PT rev (3m)5.03%
EPS NQ rev (1m)-5.62%
EPS NQ rev (3m)-13.01%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)-5.71%
Revenue NQ rev (3m)-8.11%
Revenue NY rev (1m)-0.51%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.9 | ||
| Fwd PE | 19.57 | ||
| P/S | 3.78 | ||
| P/FCF | 232.14 | ||
| P/OCF | 10.59 | ||
| P/B | 2.66 | ||
| P/tB | 3.46 | ||
| EV/EBITDA | 14.67 |
EPS(TTM)5.28
EY4.78%
EPS(NY)5.64
Fwd EY5.11%
FCF(TTM)0.48
FCFY0.43%
OCF(TTM)10.42
OCFY9.45%
SpS29.16
BVpS41.53
TBVpS31.87
PEG (NY)2.59
PEG (5Y)3.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.43% | ||
| ROE | 12.55% | ||
| ROCE | 5.31% | ||
| ROIC | 4.54% | ||
| ROICexc | 4.54% | ||
| ROICexgc | 4.88% | ||
| OM | 25.03% | ||
| PM (TTM) | 17.87% | ||
| GM | 67.81% | ||
| FCFM | 1.63% |
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-Score5
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | 135.35 | ||
| Debt/EBITDA | 4.89 | ||
| Cap/Depr | 224.65% | ||
| Cap/Sales | 34.12% | ||
| Interest Coverage | 2.78 | ||
| Cash Conversion | 88.89% | ||
| Profit Quality | 9.12% | ||
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.4 | ||
| Altman-Z | 1.14 |
F-Score5
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)11.39%
EPS 3Y5.96%
EPS 5Y6.44%
EPS Q2Q%13.43%
EPS Next Y8.06%
EPS Next 2Y7.38%
EPS Next 3Y7.25%
EPS Next 5Y7.38%
Revenue 1Y (TTM)7.88%
Revenue growth 3Y1.13%
Revenue growth 5Y2.71%
Sales Q2Q%13.4%
Revenue Next Year2.96%
Revenue Next 2Y4.11%
Revenue Next 3Y4.71%
Revenue Next 5Y5.6%
EBIT growth 1Y7.31%
EBIT growth 3Y8.08%
EBIT growth 5Y7.02%
EBIT Next Year73.21%
EBIT Next 3Y27.92%
EBIT Next 5Y20.38%
FCF growth 1Y126.82%
FCF growth 3YN/A
FCF growth 5Y31.31%
OCF growth 1Y62.09%
OCF growth 3Y16.47%
OCF growth 5Y6.49%