BOVESPA:WEGE3

Stock Analysis Report

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Executive Summary

WEG S.A. engages in the production and trade of capital goods in Brazil and internationally. More Details

Rewards

Earnings are forecast to grow 10.59% per year

Earnings grew by 44.7% over the past year

Risk Analysis

No risks detected for WEGE3 from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has WEG's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WEGE3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: WEGE3's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

3.3%

WEGE3

2.7%

BR Electrical

-2.6%

BR Market


1 Year Return

114.7%

WEGE3

53.9%

BR Electrical

-2.2%

BR Market

Return vs Industry: WEGE3 exceeded the BR Electrical industry which returned 53.3% over the past year.

Return vs Market: WEGE3 exceeded the BR Market which returned -1.4% over the past year.


Shareholder returns

WEGE3IndustryMarket
7 Day3.3%2.7%-2.6%
30 Day22.5%21.9%0.6%
90 Day8.9%29.8%14.3%
1 Year116.4%114.7%56.5%53.9%0.4%-2.2%
3 Year381.5%362.5%40.9%32.9%47.3%31.4%
5 Year714.2%648.1%91.9%71.2%195.4%144.8%

Long-Term Price Volatility Vs. Market

How volatile is WEG's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is WEG undervalued compared to its fair value and its price relative to the market?

88.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WEGE3 (R$88.97) is trading above our estimate of fair value (R$5.32)

Significantly Below Fair Value: WEGE3 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WEGE3 is poor value based on its PE Ratio (88.9x) compared to the XX Electrical industry average (24.5x).

PE vs Market: WEGE3 is poor value based on its PE Ratio (88.9x) compared to the BR market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: WEGE3 is poor value based on its PEG Ratio (8.4x)


Price to Book Ratio

PB vs Industry: WEGE3 is overvalued based on its PB Ratio (16.8x) compared to the XX Electrical industry average (1.8x).


Next Steps

Future Growth

How is WEG forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WEGE3's forecast earnings growth (10.6% per year) is above the savings rate (9.9%).

Earnings vs Market: WEGE3's earnings (10.6% per year) are forecast to grow slower than the BR market (27.4% per year).

High Growth Earnings: WEGE3's earnings are forecast to grow, but not significantly.

Revenue vs Market: WEGE3's revenue (10.8% per year) is forecast to grow faster than the BR market (10.4% per year).

High Growth Revenue: WEGE3's revenue (10.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WEGE3's Return on Equity is forecast to be high in 3 years time (25.1%)


Next Steps

Past Performance

How has WEG performed over the past 5 years?

11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WEGE3 has high quality earnings.

Growing Profit Margin: WEGE3's current net profit margins (12.8%) are higher than last year (11.4%).


Past Earnings Growth Analysis

Earnings Trend: WEGE3's earnings have grown by 11.6% per year over the past 5 years.

Accelerating Growth: WEGE3's earnings growth over the past year (44.7%) exceeds its 5-year average (11.6% per year).

Earnings vs Industry: WEGE3 earnings growth over the past year (44.7%) exceeded the Electrical industry 0.8%.


Return on Equity

High ROE: WEGE3's Return on Equity (18.8%) is considered low.


Next Steps

Financial Health

How is WEG's financial position?


Financial Position Analysis

Short Term Liabilities: WEGE3's short term assets (R$11.6B) exceed its short term liabilities (R$4.9B).

Long Term Liabilities: WEGE3's short term assets (R$11.6B) exceed its long term liabilities (R$2.7B).


Debt to Equity History and Analysis

Debt Level: WEGE3's debt to equity ratio (17.3%) is considered satisfactory.

Reducing Debt: WEGE3's debt to equity ratio has reduced from 84.8% to 17.3% over the past 5 years.

Debt Coverage: WEGE3's debt is well covered by operating cash flow (171.9%).

Interest Coverage: WEGE3 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is WEG current dividend yield, its reliability and sustainability?

0.48%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WEGE3's dividend (0.48%) isn’t notable compared to the bottom 25% of dividend payers in the BR market (0.96%).

High Dividend: WEGE3's dividend (0.48%) is low compared to the top 25% of dividend payers in the BR market (5.13%).


Stability and Growth of Payments

Stable Dividend: WEGE3 is not paying a notable dividend for the BR market, therefore no need to check if payments are stable.

Growing Dividend: WEGE3 is not paying a notable dividend for the BR market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: WEGE3 is not paying a notable dividend for the BR market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of WEGE3's dividend in 3 years as they are not forecast to pay a notable one for the BR market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Harry Schmelzer (62 yo)

13yrs

Tenure

Mr. Harry Schmelzer, Jr., has been the Chief Executive Officer of WEG S.A. since January 2008 and serves as its Executive President and Member of Executive Board. Mr. Schmelzer joined WEG in 1980 and worke...


Leadership Team

NamePositionTenureCompensationOwnership
Harry Schmelzer
CEO, Executive President & Member of Executive Board13yrsno datano data
Andre Rodrigues
CFO, Investor Relations Officer & Member of Executive Boardno datano datano data
Wilson Watzko
Chief Controllership Officer & Member of Executive Boardno datano datano data
Carlos Prinz
MD of Transmission & Distribution Business Unit and Member of Executive Boardno datano datano data
Eduardo De Nobrega
COO of WEG China & Member of Executive Boardno datano datano data
Reinaldo Richter
MD of Paints Business Unit & Member of Executive Boardno datano datano data
Hilton da Veiga Faria
HR and Sustainability Officer & Member of Executive Boardno datano datano data
Manfred Johann
MD of WEG Automation Business Unit & Member of Executive Boardno datano datano data
Daniel Godinho
Institutional Relations and Marketing Officer & Member of Executive Boardno datano datano data
Alberto Kuba
MD of WEG Motors Industrial & Member of Executive Board1yrno datano data
João Paulo da Silva
MD of WEG Energia & Member of Executive Board1yrno datano data
Julio Ramires
MD of WEG Motors Commercial & Appliance and Member of Executive Board1yrno datano data

1.0yrs

Average Tenure

Experienced Management: WEGE3's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Nildemar Secches
Vice President of the Board10.75yrsno datano data
Dan Ioschpe
Independent Director9yrsno datano data
Miguel Normando Saad
Independent Director4yrsno datano data
Alidor Lueders
Member of Fiscal Councilno datano datano data
Decio da Silva
President of the Board of Directors13yrsno datano data
Martin Werninghaus
Director15yrsno datano data
Umberto Gobbato
Independent Director2.58yrsno datano data
Sergio Luiz Schwartz
Director16yrsno datano data
Jorge Esteban
Director of Unidade Pulverlux S.A.no datano datano data
Vanderlei da Rosa
Member of Fiscal Councilno datano datano data
Adelino Pinho
Member of Fiscal Council2.58yrsno datano data

9.9yrs

Average Tenure

64yo

Average Age

Experienced Board: WEGE3's board of directors are considered experienced (9.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

WEG S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: WEG S.A.
  • Ticker: WEGE3
  • Exchange: BOVESPA
  • Founded: 1961
  • Industry: Electrical Components and Equipment
  • Sector: Capital Goods
  • Market Cap: R$183.867b
  • Shares outstanding: 2.10b
  • Website: https://www.weg.net/institutional/BR/en/

Location

  • WEG S.A.
  • Avenida Prefeito Waldemar Grubba, 3300
  • Jaraguá do Sul
  • Santa Catarina
  • 89256-900
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WEGE3BOVESPA (Bolsa de Valores de Sao Paulo)YesOrdinary SharesBRBRLMar 1993
WEGZ.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDSep 2010

Biography

WEG S.A. engages in the production and trade of capital goods in Brazil and internationally. The company offers electric motors, generators, and transformers; gear units and geared motors; hydraulic and st...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/22 22:00
End of Day Share Price2021/01/22 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.