"With nearly 100% of earnings derived from regulated operations, post-merger Wisconsin Energy is a premier vertically integrated electric and gas utility company and a core utility holding," Barclays analysts said.
Wisconsin Energy targets 5% to 7% annual earnings growth and similar annual dividend growth among the highest in the regulated utility universe, Barclays noted.
Regulatory landscapes and merger approval agreements provide reasonable certainty of recovery of investment and earnings growth potential that over 70% of the combined company's assets are in WI, which has a constructive regulatory environment, Barclays added.
Wisconsin Energy Group is a holding company that operates through utility energy segment and non-utility energy segment segments.
Separately, TheStreet Ratings team rates WISCONSIN ENERGY CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate WISCONSIN ENERGY CORP (WEC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WISCONSIN ENERGY CORP's earnings per share declined by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WISCONSIN ENERGY CORP increased its bottom line by earning $2.58 versus $2.51 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $2.58).
- WEC, with its decline in revenue, slightly underperformed the industry average of 12.3%. Since the same quarter one year prior, revenues fell by 18.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Multi-Utilities industry average. The net income has decreased by 5.7% when compared to the same quarter one year ago, dropping from $207.60 million to $195.80 million.
- The gross profit margin for WISCONSIN ENERGY CORP is currently lower than what is desirable, coming in at 33.24%. Regardless of WEC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WEC's net profit margin of 14.10% compares favorably to the industry average.
- You can view the full analysis from the report here: WEC Ratings Report