_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Wec Energy Group, Inc. (XNYS:WEC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WEC
Name:
WEC ENERGY GROUP, INC. (XNYS:WEC)
Sector:
693.30M
Industry:
Utilities�Regulated Electric
CEO:
Mr. J. Kevin Fletcher
Total Employees:
6,938
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -9.42% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WEC ENERGY GROUP, INC.(WEC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED ELECTRIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
103.01
One Month Price Target:
$103.18
Six Month Price Target :
$104.01
Likely Price in One Year's Time:
Ticker:
$105.01
Likely Trading Range Today Under (Normal Volatility)
$102.72
Price Upper limit ($) :
$103.38
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$99.02
This week:
$94.08
This month :
$85.14
Other Primary facts
Market Cap:
32.51B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
315.43M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.15%
-18.05%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$121.55
$113.03
$84.47
$92.99
Medium risk (<10%) entry points
Buy Call
Sell Call
$110.26
Buy Put:
Sell Put:
$108.44
$95.74
$97.58
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WEC
Sharpe Ratio:
1.57%
Comparison:
WEC, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 34.26% higher than the industry
& is -30.99% lower than the market/S&P 500 average
Average Returns/Yield of
WEC
Daily returns:
0.04%
Weekly returns:
0.19%
Monthly returns:
0.78%
Yearly returns:
7.85%
Comparison of returns:
Average annual returns/yield (last 3 years) is 18.81% above industry average
Classification:
WEC, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.51
Statistical test of Returns:
WEC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.91%
Weekly Volatility:
4.26%
Monthly Volatility:
8.53%
Yearly Volatility:
29.55%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.45%
Volatility in last five trading days has been -24.04% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.88%
Weekly VaR:
-8.67%
Monthly VaR:
-17.34%
How Much Can the price of
WEC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-60.08%
This translates to price declining to:
$87.67
This translates to price declining to:
$41.12
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WEC is a 22.41% riskier investment compared to the market/S&P 500 & is 4.87% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.01% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WEC
Beta in relation to market/S&P 500--0.29
Expected beta in 1 year's time:
0.434
Expected beta in 3 year's time:
0.613
Unlevered (debt free) Beta:
0.144
Beta in relation to Nasdaq (XNAS):
0.373
Beta in relation to all global stocks::
0.589
Beta Comparison & Analysis
Beta of competitors/peers::
0.509
Beta is -43.21% lower than peers
Average Industry Beta:
0.5
Beta is -42.09% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.26%
Sustainable growth rate is 50.77% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.042
Alpha is 228.73% above industry average alpha yield
Alpha is 267% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WEC
Equity cost of capital:
0.051
Equity cost of capital is -21.92% below industry mean WACC
Unlevered (without debt) cost of capital:
2.55%
Before-tax cost of debt:
3.10%
After-tax cost of debt:
2.45%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.45%
WACC is -22.09% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$27.05
Revenue growth rate per share of (3Y):
2.84
Annual revenue growth rate is -789.85% below industry average
EPS:
$4.29
Expected Annual growth rate of EPS (3Y):
4.52%
Expected future EPS growth rate is -173.01% lower than the Utilities�Regulated Electric industry
Free cash flow (FCF) per share:
$1.71
Balance sheet equity growth per share: 22.63%
Equity growth rate per share is 285.58% higher than the industry
Debt per share
$42.84
EBITDA per share
$10.05
Valuation Analysis Today of
WEC
P/E Ratio:
23.82
P/E Ratio of Competitors/Peers:
24.28
P/E ratio is -1.91% lower than main peers & is -13.97% lower than the industry
Stock price/value with industry average P/E ratio: $118.78
WEC is -13.28% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $134.57
Present value of the expected future dividends only: $97.33
P/S (Price to Sales ratio):
3.81
Price to sales ratio is 31.18% above the industry mean
P/B (Price to book value ratio):
2.84
Price to free cash flow: 60.36
-
Net income growth rate (3Y):
22.76%
Net income growth rate is -872.84% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 16.92%
Dividend yeild: 2.73%
Previous Dividend: $0.73
Previous adjusted dividend: $0.73
Previous Dividend: $2.81
Expected next dividend best case: $0.76
Expected next dividend worst case: $0.69
Average dividend payment (long-term): $0.66
Average dividend increase/decrease (growth rate) % per period: 2.18%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 20/07/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 21/04/2022
Dividend History:
2022-05-12--$0.73
2021-11-10--$0.68
2021-05-13--$0.68
2022-02-11--$0.73
2021-08-12--$0.68
2021-02-11--$0.68
Dividend growth rate is -318.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
119.88%
Net debt to equity ratio:
133.89%
Debt to assets ratio:
34.67%
Net debt to assets ratio:
38.73%
Debt-to-asset ratio is -44.83% below industry average
Ability to repay debt:
Interest coverage ratio:
6.76
Interest coverage ratio is 162.40% more than industry average
Looking forward:
Debt growth rate:
365.70%
Annual debt growth is 696% higher than industry average debt growth rate
Debt repayment rate in last quarter: 3.31%
Analysis of Key Statistics
Correlation of price movement with the market:
0.509
Statistical significance of correlation:
WEC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.597
Stock price is -14.72% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.597
Correlation of price movement with Nasdaq (^IXIC):
0.028
Covariance of price movement with the market:
0.031
Kurtosis
20.698
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.847
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
WEC
Gross Profit Margin Ratio:
148%
Operating Profit Margin Ratio:
21.29%
Operating profit margin is 83.03% higher than the industry
Net Profit Margin Ratio:
148%
Effective Tax Rate:
15.70%
Effective tax rate is -22.05% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.04%
Return on equity (ROE) is 32.44% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.48%
Return on assets (ROA) is 50.61% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
0.79
Current ratio is -67.20% below industry average
Cash Conversion Cycle (days):
0.6
Cash conversion cycle is -99.41% below industry average
The remaining useful life of property plant & equipment is: 12.5 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates -55% less revenue than industry average revenue per employee
EBITDA generated per employee:
456.9K
Each employee generates -61% less EBITDA than industry average revenue per employee
Profit generated per employee:
195.6K
Each employee generates -52% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
99.9K
Each employee generates -403% less free cash flow than industry average revenue per employee
Assets/Capital per employee
5.2M
Each employee generates -403% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WEC
Eversource Energy (XNYS:ES)
CONSOLIDATED EDISON, INC. (XNYS:ED)
AMERICAN WATER WORKS COMPANY, INC. (XNYS:AWK)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (XNYS:PEG)
EDISON INTERNATIONAL (XNYS:EIX)
FIRSTENERGY CORP. (XNYS:FE)
DTE ENERGY COMPANY (XNYS:DTE)
AMEREN CORPORATION (XNYS:AEE)
PPL CORPORATION (XNYS:PPL)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�25%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.53B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.41B
3.12B
-
-
-
-
1.31B
1.31B
-
469.20M
1.09B
3.17B
1.82B
1.36B
1.61B
252.50M
1.36B
Statement of Cash Flow
Date:
Period:
278.10M
Differed Income Tax :
103.80M
Stock Based Compensation :
-
Change in Working Capital :
172.40M
Accounts Receivables:
- 164000.00K
Other Working Capital:
-
Other Non-Cash Items:
- 45500.00K
Net Cash Provided by Operating Activities:
1.08B
Investments in PP&E:
-
Net Acquisitions:
- 21100.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
33.80M
-
33.80M
1.64B
368.80M
524.30M
2.56B
27.11B
3.05B
-
1.82B
-
4.43B
36.41B
-
38.97B
693.70M
1.61B
-
-
957.30M
3.26B
13.51B
5.94B
24.27B
-
27.53B
3.20M
7.11B
- 3200.0K
4.13B
March 31, 2022 at 6:00:00 AM
6.72B
11.27B
38.80B
-
15.13B
15.1B
-
- 317100.00K
- 338200.00K
- 463300.00K
-
- 23400.00K
- 229600.00K
9.80M
- 706500.00K
-
32.10M
119.60M
87.50M
1.08B
- 383500.00K
693.30M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
WEC
2023
2024
2025
2026
2027
$119.55
$121.88
$124.25
$126.66
$129.12