WEC's Above-Average Electricity Demand Growth Supports Investment Plan

Strategist

Andrew Bischof

WEC Energy Group is the largest Midwest utility, with approximately $29 billion of rate base and derives most of its earnings derived from regulated operations. Nearly 75% of earnings come from areas with constructive Wisconsin and Federal Energy Regulatory Commission regulation. Its regulated-like commercial renewable energy business accounts for the remainder of earnings.

We expect the company to invest $23.7 billion of capital through 2028, which includes its investment in American Transmission. This investment plan supports our forecast that the company will achieve the high end of management's narrow 6.5%-7% annual earnings growth target.

In Wisconsin, the company enjoys rates based on two-year forward test years and an earnings-sharing mechanism over its allowed return on equity. Its average allowed ROE tops 9.8% at the company's subsidiaries in the state and is consistently above peers'. The company's most recent rate outcome is consistent with our view that Wisconsin remains a very constructive regulatory environment for utilities. We expect the utility to file for new rates in 2024. 

The company is moving aggressively on its renewable energy investment plan. It targets investing $7.0 billion for 3.8 gigawatts of new solar, battery storage, and wind generation development through 2028. The company plans to retire 1,700 MW of coal generation and to retire older, less-efficient natural gas generation. The company plans to use coal generation as a backup fuel only by 2030 and exit coal generation by 2032.

The company recently increased its capital investment program in large part to support estimated 4.5%-5.0% annual electricity demand growth from 2026 to 2028. New demand is coming from significant economic development in southeastern Wisconsin, particularly data centers. The company will increase investments in renewable energy, natural gas generation, and transmission. 

WEC Energy holds a 60% majority stake in ATC, through which it earns above-average equity returns despite recent FERC decisions.

Business Strategy & Outlook

Service territory monopolies and efficient scale advantages are the primary sources of economic moat for regulated utilities such as WEC Energy Group. State and federal regulators typically grant regulated utilities exclusive rights to charge customers rates that allow the utilities to earn a fair return on and return of the capital they invest to build, operate, and maintain their distribution networks. In exchange for regulated utilities’ service territory monopolies, state and federal regulators set returns at levels that aim to minimize customer costs while offering fair returns for capital providers.

This implicit contract between regulators and capital providers should, on balance, allow regulated utilities to outearn their costs of capital, though observable returns might vary in the short run based on demand trends, investment cycles, operating costs, and access to financing. Intuitively, utilities should have an economic moat based on efficient scale, but in some cases regulation offsets this advantage, preventing excess returns on capital. The risk of adverse regulatory decisions precludes regulated utilities from earning wide economic moat ratings. However, the threat of material value destruction is low, and normalized returns exceed costs of capital in most cases, leaving us comfortable assigning narrow moat ratings to many regulated utilities.

Narrow

Economic Moat

WEC Energy Group

WEC Energy Group, Inc. is a holding company, which engages in the generation and distribution of electricity and natural gas. It operates through the following segments: Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure and Corporate & Other. The Wisconsin segment refers to the electric and gas utility operations. The Illinois segment deals with natural gas utility and non-utility activities. The Other States segment pertains to natural gas operations of the firm's subsidiaries. The Electric Transmission segment holds interests in state regulatory commissions. The Non-Utility Energy Infrastructure segment includes Wisconsin Electric Power, which owns and leases generating facilities. The Corporate and Other segment refers to the firm's administrative and holding activities. The company was founded in 1981 and is headquartered in Milwaukee, WI.

Earnings data Q2 2021

Earnings data Q3 2021

Earnings data Q4 2021

Earnings data Q1 2022

Earnings data Q2 2022

Earnings data Q3 2022

Earnings data Q4 2022

Earnings data Q1 2023

Earnings data Q2 2023

Earnings data Q3 2023

Earnings data Q4 2023

Earnings data Q1 2024

Earnings data Q2 2024

WEC Energy Group posts robust earnings, eyes renewables for growth

WEC Energy Group's Q4 2022 earnings call highlighted strong financial performance, credit support, and strategic investments in renewables and infrastructure. Despite challenges like material shortages, the company remains optimistic about growth opportunities through acquisitions and innovative projects.

WEC Energy Group reports Q1 earnings impacted by mild weather

WEC Energy Group navigates mild weather impacts with initiatives to offset earnings. Focus on ESG investments and zero-carbon projects for sustainable growth. Challenges in demand trends and gas heating transition balanced by opportunities in earnings growth and solar investments.

WEC Energy Group meets Q2 earnings, focuses on innovation and growth

WEC Energy Group reports solid Q2 earnings in line with yearly guidance, emphasizing financial discipline and customer satisfaction. Strategic initiatives with Microsoft and regulatory progress highlight the company's commitment to innovation and growth. Challenges include managing equity issuance and regulatory complexities, while opportunities lie in renewable energy expansion and operational efficiency.

WEC Energy Group reports solid Q3 earnings and accelerates ESG investments

WEC Energy Group's performance in Q3 met expectations with a strong focus on ESG investments and renewable energy transition.
The company's strengths lie in its improving balance sheet metrics, strategic capital reallocation, and tax credit expectations.
Challenges include managing one-time expenses, regulatory hurdles in transitioning to natural gas, and aligning rate changes with inflation.
Opportunities include investments in renewables, leveraging economic growth, and potential O&M upside for a robust fourth quarter.

WEC Energy Group reports solid earnings, eyes growth in renewables

WEC Energy Group delivered strong financial performance in 2023 despite setbacks in Illinois. The company is focused on enhancing its infrastructure and customer satisfaction while navigating regulatory challenges. Opportunities for growth lie in expanding capital investments in Wisconsin and renewable energy projects.

WEC Energy Group exceeds Q1 earnings, invests in sustainability

WEC Energy Group's strong financial performance and strategic investments position it well for future growth and sustainability goals.
While facing challenges in cost management and customer-specific sales, the company has opportunities for revenue growth and operational enhancements.
Navigating regulatory changes and stakeholder expectations will be key, but the company's focus on reliability and cleaner energy sources is a strength.
Overall, WEC Energy Group's proactive approach to investments and operational improvements bodes well for its long-term success in a dynamic energy landscape.

Revenue

Cost of revenue

Gross profit

Operating expenses

SG&A

Other

Operating income

EBITDA

Net income

Earnings per share

Total assets

Current assets

Cash & equivalents

Receivables

Inventory

Non-current assets

Net PPE

Intangibles

Total liabilities

Current liabilities

Short term debt

Income tax payable

Non-current liabilities

Long-term debt

Total equity

Stockholders equity

Minority interest

Total liabilities & equity

Total debt

Net debt

Book value per share

Cash from operations

Funds from operations

Change in working capital

Cash from investing

Capital expenditure

Purchase/sale of investments

Purchase/sale of business

Other sources

Cash from financing

Change in stock

Change in debt

Cash dividends paid

Cash from other sources

Net change in cash

Free cash flow

WEC Energy Group, Inc. (WEC) CEO Joseph Fletcher on Q4 2020 Results - Earnings Call Transcript

WEC Energy (WEC) delivered earnings and revenue surprises of 2.70% and -3.08%, respectively, for the quarter ended December 2020. Do the numbers hold clues to what lies ahead for the stock?

WEC Energy Group (WEC) Q4 Earnings Beat Estimates

MILWAUKEE, Feb. 4, 2021 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) today reported net income of $1.20 billion, or $3.79 per share, for 2020. This compares to earnings of $1.13 billion, or $3.58 per share, for 2019. For the fourth quarter of 2020, WEC Energy Group recorded net income of...

WEC Energy Group posts strong 2020 results

Apple

American Electric Power Company

Amgen

Costco

Cintas

W.W. Grainger

Intel

Eli Lilly

Landstar System

Norfolk Southern

Visa

In this article series, we provide a summary of upcoming ex-dividend dates.

Upcoming Ex-Dividend Dates: February 3-12, 2021

MILWAUKEE, Jan. 28, 2021 /PRNewswire/ -- WEC Energy Group Inc. (NYSE: WEC) will issue its 2020 fourth-quarter and year-end earnings news release before the stock market opens Thursday, Feb. 4. A conference call for security analysts is scheduled for the same day at 1 p.m. Central time....

WEC Energy Group to announce 2020 fourth-quarter and year-end financial results Feb. 4

CenterPoint Energy

CNP vs. WEC: Which Stock Is the Better Value Option?

CNP or WEC: Which Is the Better Value Stock Right Now?

WEC Energy's (WEC) board of directors approves a 7.1% increase in the quarterly dividend rate. The company is aiming for dividend growth in the 5-7% range over the long term.

WEC Energy (WEC) Rewards Shareholders With 7.1% Dividend Hike

MILWAUKEE, Jan. 21, 2021 /PRNewswire/ -- The board of directors of WEC Energy Group (NYSE: WEC) today declared a quarterly cash dividend of 67.75 cents per share on the company's common stock, an increase of 7.1 percent over the current quarterly dividend of 63.25 cents a share. This...

WEC Energy Group raises quarterly dividend

CNP vs. WEC: Which Stock Should Value Investors Buy Now?

WEC Energy (WEC) to raise its quarterly dividend by 7.1%, totaling the annual dividend to $2.71 per share. Also, it initiates its 2021 earnings guidance.

WEC Energy (WEC) to Reward Shareholders Via 7.1% Dividend Hike

MILWAUKEE, Dec. 3, 2020 /PRNewswire/ -- Cristy Garcia-Thomas, chief external affairs officer for Advocate Aurora Health Inc., has been elected to the board of directors of WEC Energy Group (NYSE:WEC), effective Jan. 1. "We're delighted that Cristy has agreed to serve as a director," said...

Garcia-Thomas elected to WEC Energy Group board of directors

WEC Energy Group Inc. said Thursday it plans to raise its quarterly dividend by 7.1%, to 67.75 cents a share from 63.25 cents a share. The utilities company's new dividend will be payable March 1 to shareholders of record on Feb. 14.

WEC Energy to raise dividend by 7.1%, but will still yield below utilities peer group

MILWAUKEE, Dec. 3, 2020 /PRNewswire/ -- The board of directors of WEC Energy Group (NYSE: WEC) today announced that it is planning to raise the quarterly dividend on the company's common stock to 67.75 cents per share in the first quarter of 2021. This would represent an increase of 4.5...

WEC Energy Group announces plan to increase dividend by 7.1 percent

WEC Energy (WEC) reported earnings 30 days ago. What's next for the stock?

WEC Energy (WEC) Down 5.9% Since Last Earnings Report: Can It Rebound?

WEC Energy Group's diluted EPS payout ratio is positioned to be around 67% this fiscal year, which remains sustainable over the long-term. WEC Energy Group has delivered strong operating results through the first 9 months of this fiscal year, with revenues only down 4.8% YoY and diluted EPS up 8.2% YoY.

WEC Energy Group: An Excellent Business Trading At An 18% Premium

Adams Diversified Equity Fund

First Industrial Realty Trust

I sure hope you haven't listened to the bleating pundits begging us to sell everything ahead of Election Day.

A Contrarian Move For 8.8% Dividends, Fast Upside

On the back of businesses reopening and a favorable weather, WEC Energy's (WEC) Q3 earnings and revenues improve on a year-over-year basis.

WEC Energy's (WEC) Q3 Earnings Surpass, 2020 EPS View Up

WEC Energy Group's (WEC) CEO Kevin Fletcher on Q3 2020 Results - Earnings Call Transcript

WEC Energy (WEC) delivered earnings and revenue surprises of 10.53% and -1.81%, respectively, for the quarter ended September 2020. Do the numbers hold clues to what lies ahead for the stock?

WEC Energy Group (WEC) Surpasses Q3 Earnings Estimates

MILWAUKEE, Oct. 27, 2020 /PRNewswire/ -- WEC Energy Group Inc. (NYSE: WEC) will issue its 2020 third-quarter earnings news release before the stock market opens Tuesday, Nov. 3. A conference call for security analysts is scheduled for the same day at 1 p.m. Central time. To listen to...

WEC Energy Group to announce 2020 third-quarter results Nov. 3

Atmos Energy

Xcel Energy

Best Of The Best Utilities, Part 4: Atmos Energy Over WEC Energy And Xcel Energy

WEC Energy delivered a strong Q2 2020 despite the outbreak of COVID-19.

WEC Energy's Business Is Resilient Even In The Midst Of A Challenging Environment

WEC Energy's (WEC) Q2 earnings top the Zacks Consensus Estimate. Also, the same inches up on a year-over-year basis owing to rise in residential demand.

WEC Energy (WEC) Q2 Earnings Beat Estimates, Revenues Miss

WEC Energy Group, Inc. (WEC) CEO Kevin Fletcher on Q2 2020 Results - Earnings Call Transcript

News for WEC Energy Group Stock (WEC)