Critical Review: WEC Energy Group (WEC) and Dominion Energy (D)
Dominion Energy (NYSE: D) and WEC Energy Group (NYSE:WEC) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.
This table compares Dominion Energy and WEC Energy Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WEC Energy Group||12.79%||10.62%||3.18%|
Dominion Energy has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Dominion Energy and WEC Energy Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WEC Energy Group||1||7||1||0||2.00|
Dominion Energy presently has a consensus target price of $81.78, indicating a potential upside of 9.05%. WEC Energy Group has a consensus target price of $65.75, indicating a potential upside of 4.18%. Given Dominion Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Dominion Energy is more favorable than WEC Energy Group.
Dominion Energy pays an annual dividend of $3.08 per share and has a dividend yield of 4.1%. WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. Dominion Energy pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WEC Energy Group pays out 68.4% of its earnings in the form of a dividend. Dominion Energy has raised its dividend for 7 consecutive years and WEC Energy Group has raised its dividend for 9 consecutive years.
Insider & Institutional Ownership
64.5% of Dominion Energy shares are owned by institutional investors. Comparatively, 72.6% of WEC Energy Group shares are owned by institutional investors. 0.4% of Dominion Energy shares are owned by insiders. Comparatively, 1.0% of WEC Energy Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Dominion Energy and WEC Energy Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dominion Energy||$11.73 billion||4.12||$2.12 billion||$3.39||22.12|
|WEC Energy Group||$7.47 billion||2.67||$940.20 million||$3.04||20.76|
Dominion Energy has higher revenue and earnings than WEC Energy Group. WEC Energy Group is trading at a lower price-to-earnings ratio than Dominion Energy, indicating that it is currently the more affordable of the two stocks.
Dominion Energy beats WEC Energy Group on 11 of the 17 factors compared between the two stocks.
About Dominion Energy
Dominion Energy, Inc., formerly Dominion Resources, Inc., is a producer and transporter of energy. Dominion is focused on its investment in regulated electric generation, transmission and distribution and regulated natural gas transmission and distribution infrastructure. It operates through three segments: Dominion Virginia Power operating segment (DVP), Dominion Generation, Dominion Energy, and Corporate and Other. The DVP segment includes regulated electric distribution and regulated electric transmission. The Dominion Generation segment includes regulated electric fleet and merchant electric fleet. The Dominion Energy segment includes gas transmission and storage, gas gathering and processing, liquefied natural gas import and storage, and nonregulated retail energy marketing. As of December 31, 2016, Dominion served utility and retail energy customers, and operated an underground natural gas storage system with approximately one trillion cubic feet of storage capacity.
About WEC Energy Group
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
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