Attractive Price-to-Book Ratio
Reasonable Price-to-Earnings Ratio
Strong Net Profit Margin
Healthy Operating Profit Margin
Manageable Debt Levels
Sufficient Interest Coverage
📈 Strong Financial Performance
🏗️ Robust Capital Investment Plan
🌱 Diverse Energy Mix
🔋 Growth in Data Center Demand
📊 Positive Earnings Guidance
High Price-to-Cash-Flow Ratio
Elevated EV-to-EBITDA Ratio
Moderate Return on Equity
High Dividend Payout Ratio
Low Current and Quick Ratios
Minimal Cash Reserves
⚖️ Regulatory Challenges
⏳ Delays in Project Implementation
Overall, WEC Energy Group demonstrates strong business quality through its solid financial performance, robust capital investment plans, and diverse energy mix. Future prospects are bolstered by growing demand from data centers and positive earnings guidance, though regulatory challenges and project delays present risks that need to be managed.
Analysis Date: February 4, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$102.33
Current Market Price: $103.94
IV/P Ratio: 0.98x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-2.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for WEC
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (21.65)
P/B ratio ≤ 1.5 (0.89)
Current ratio ≥ 2.0 (0.60x)
Long-term debt < Net current assets (-9.06x)
Margin of safety (-2.0%)
WEC does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
WEC's net profit margin of 17.77% indicates that the company retains a significant portion of its revenue as profit, reflecting good cost control and operational efficiency.
The operating profit margin stands at 25.99%, which is indicative of the company's ability to generate profit from its core operations.
The return on equity (ROE) of 8.31% is somewhat moderate, indicating that the company is generating a lower return on shareholder equity compared to industry averages.
A dividend payout ratio of 69.10% suggests that a significant portion of earnings is being paid out as dividends, which may limit reinvestment into the business.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
8.31%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.96%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
37.06%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
17.77%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.55 indicates that WEC has a relatively balanced approach to leveraging, suggesting financial stability.
An interest coverage ratio of 2.76 demonstrates that the company can comfortably meet its interest obligations from its earnings.
The current ratio of 0.60 and the quick ratio of 0.43 indicate potential liquidity issues, as the company may struggle to cover short-term liabilities.
A cash ratio of 0.002 suggests that WEC has very little cash available to cover short-term obligations, which could be a concern for liquidity.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.54x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.60x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
WEC Energy Group reported adjusted earnings of $4.88 per share for 2024, which is a $0.25 increase from 2023. This reflects solid financial management and effective cost control despite challenges such as warmer winter weather.
The company has a five-year capital plan totaling $28 billion, the largest in its history, which includes substantial investments in renewable energy and infrastructure. This positions WEC well for future growth.
WEC is focusing on a balanced generation mix, including significant investments in renewable energy, which will enhance its competitive position in a market that increasingly values sustainability.
Regulatory uncertainty remains a concern, particularly with ongoing proceedings in Illinois that could impact future gas investment decisions. WEC is engaged in evaluating the future of natural gas in the state, which could affect its operational strategies.
The expansion of major data centers, including investments from Microsoft and Cloverleaf, is expected to drive incremental demand for energy in the region, positioning WEC for strong growth in electricity sales.
The company has reaffirmed its 2025 earnings guidance in the range of $5.17 to $5.27 per share, indicating confidence in its growth trajectory amid a robust economic backdrop.
The time required to ramp up new generation capacity could impact the company’s ability to meet demand from new data center customers quickly. It may take three to four years to bring significant new capacity online.