WEC Energy Group Inc (NYSE:WEC)’s business is predicted to grow 4.3% during the next year. What are the important facts you need to know? I’m going to look at the latest data and analyse the future of this stock in more detail. See our latest analysis for WEC
Exciting times ahead?
Based on analysts estimates WEC’s earnings are to grow 19% over the next 3 years. This would see the EPS rise to $3.75 levels which would no doubt please investors who are used to an average of $2.64 over the past few years.
This will project the annual earnings to levels above what has been seen in the past few years.
During the same time revenue is predicted to grow from $7.47 Billion to $8.57 Billion in 2020 and net income is predicted to slightly grow from $939 Million to $1.22 Billion in 2020, roughly growing 1.3x. Margins are predicted to be a respectable 14.2% during this time as well.
What is the basis for potential growth?
WEC Energy Group has outperformed the Utilities industry over the past year.
With Return on Equity of 10.6% WEC Energy Group has performed better than the Utilities industry average of 9.97%, whilst shareholders would consider this acceptable no doubt they are hoping for an improvement in the coming years. This is expected to slightly improve with analysts expecting ROE in 3 years to be 11.3%.
Return on equity (ROE) is a measure of how much profit (net income) a company makes as a percentage of the shareholders equity. Equity is made up of funds from the original issuing of shares and any retained earnings from previous financial years. It varies considerably across sectors, for this reason it is important to asses a stocks ROE relative to its industry. Whilst it is true that the higher the ROE the better the company is performing, ROE does have a weakness. A stock with a disproportionate amount of debt can lead to a small equity base. Thus, a small amount of net income (the numerator) could still produce a high ROE off a modest equity base (the denominator). For this reason investors should always consider the debt situation in conjunction with ROE.
While WEC Energy Group is not a fast growing company, it can still offer very interesting investment opportunities. I recommend you see our latest FREE analysis to find out!
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