WEC

WEC Energy Group, Inc.

91.81
USD
-4.00%
91.81
USD
-4.00%
86.84 108.39
52 weeks
52 weeks

Mkt Cap 28.96B

Shares Out 315.44M

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Here's Why We Think WEC Energy Group (NYSE:WEC) Is Well Worth Watching

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up. Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like WEC Energy Group (NYSE:WEC). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing. How Quickly Is WEC Energy Group Increasing Earnings Per Share? If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years WEC Energy Group grew its EPS by 7.7% per year. While that sort of growth rate isn't anything to write home about, it does show the business is growing. Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for WEC Energy Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 13% to US$9.0b. That's progress. You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers. While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for WEC Energy Group? Are WEC Energy Group Insiders Aligned With All Shareholders? Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right. Insider selling of WEC Energy Group shares was insignificant compared to the one buyer, over the last twelve months. Namely, Independent Director Thomas Lane out-laid US$537k for shares, at about US$89.47 per share. It's hard to ignore news like that. On top of the insider buying, it's good to see that WEC Energy Group insiders have a valuable investment in the business. With a whopping US$58m worth of shares as a group, insiders have plenty riding on the company's success. This should keep them focused on creating long term value for shareholders. Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. The cherry on top is that the CEO, Scott Lauber is paid comparatively modestly to CEOs at similar sized companies. For companies with market capitalisations over US$8.0b, like WEC Energy Group, the median CEO pay is around US$13m. The WEC Energy Group CEO received total compensation of just US$5.0m in the year to December 2021. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally. Is WEC Energy Group Worth Keeping An Eye On? One important encouraging feature of WEC Energy Group is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. Don't forget that there may still be risks. For instance, we've identified 3 warning signs for WEC Energy Group (1 is a bit concerning) you should be aware of. Keen growth investors love to see insider buying. Thankfully, WEC Energy Group isn't the only one. You can see a a free list of them here. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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