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WEC — WEC Energy Group

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 28.95%
Profit Margins 16.24%
Return on Equity 11.68%
Return on Assets 3.04%
Free Float 0.32B
Dividend Yield 3.21%
Short Int % Utilisation 5.52%

2.2 Growth

Metric Value
Revenue Growth 9.0%
Free Cash Flow -2.07B
EBITDA 15.22 (Ratio)
Enterprise Value 59.85B
EV/Revenue 5.93
EV/EBITDA 15.22

Revenue growth of 9.0% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 7.88%
Risk / Std Dev (Ann.)* 15.97%
1-Year Price Return* 6.46%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $110.52
52-Week Range $102.95 – $119.91
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $9.80B $8.60B
Net income Reported net income $1.56B $1.53B
Total assets Year-end reported balance $51.52B $47.36B
Shareholders’ equity Year-end reported balance $13.64B $12.43B
Net margin Net income ÷ revenue 15.89% 17.76%
Asset turnover Revenue ÷ total assets 0.1902x 0.1816x
Equity multiplier Total assets ÷ shareholders’ equity 3.7759x 3.8118x
ROE Net margin × asset turnover × equity multiplier 11.42% 12.29%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $9.80B
Prior annual revenue $8.60B
EBIT $2.57B
Tax rate 7.10%
NOPAT = EBIT × (1 − tax rate) $2.39B
Forecast start-growth basis 13.96%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $2.39B
Add: depreciation & amortisation $1.48B
Less: capital expenditure -$4.40B
Less/(add): working-capital cash-flow movement -$203.40M
Current unlevered FCFF -$736.77M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 13.96% $2.72B $1.68B -$5.01B -$231.79M -$839.59M -$815.58M
2 11.09% $3.02B $1.87B -$4.64B -$257.50M -$8.70M -$7.97M
3 8.23% $3.27B $2.03B -$4.03B -$278.68M $990.64M $856.84M
4 5.36% $3.44B $2.13B -$3.19B -$293.63M $2.10B $1.71B
5 2.50% $3.53B $2.19B -$2.19B -$300.97M $3.23B $2.49B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.46
Cost of equity 7.25%
Pre-tax cost of debt 4.20%
WACC 5.98%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $95.26B
Implied terminal EV / EBITDA 15.91x
Terminal value as % of enterprise value 94.39%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $4.23B
Present value of terminal value $71.26B
Indicated enterprise value $75.49B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $75.49B
Less: gross interest-bearing debt $22.31B
Add: cash and equivalents $27.60M
Add: affiliate investments $0.00
Less: minority interests $408.80M
Indicated common equity value $52.80B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 323,800,000.00
Share-count basis reported diluted weighted-average shares
Current market price $111.26
DCF indicative value per share $163.06
Indicative value vs. market price 46.56%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration review required
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 0/4 evidenced checks
Lynch-inspired balance-and-growth checks 1/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:54:20.263556 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 4.86% 9.42%
Adjusted R² 0.06 0.07
Annualised residual volatility 14.96% 14.80%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.04 (-0.49) 0.05 (0.53)
Size (SMB) 0.20 (1.70) 0.17 (1.33)
Value (HML) 0.27 (2.63) 0.13 (1.02)
Profitability (RMW) NM 0.12 (1.11)
Investment (CMA) NM 0.29 (1.56)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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