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WEC Energy Group, Inc. (WEC)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$115.48 - $282.91$172.20
Multi-Stage$88.02 - $95.96$91.92
Blended Fair Value$132.06
Current Price$114.59
Upside15.25%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.24%11.61%3.293.072.862.662.492.322.172.051.951.42
YoY Growth--7.32%7.22%7.38%7.12%7.19%6.77%6.21%5.06%37.22%29.38%
Dividend Yield--3.02%3.76%3.02%2.67%2.66%2.63%2.78%3.26%3.21%2.36%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,695.30
(-) Cash Dividends Paid (M)1,122.40
(=) Cash Retained (M)572.90
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)339.06211.91127.15
Cash Retained (M)572.90572.90572.90
(-) Cash Required (M)-339.06-211.91-127.15
(=) Excess Retained (M)233.84360.99445.75
(/) Shares Outstanding (M)320.78320.78320.78
(=) Excess Retained per Share0.731.131.39
LTM Dividend per Share3.503.503.50
(+) Excess Retained per Share0.731.131.39
(=) Adjusted Dividend4.234.624.89
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.24%6.24%7.24%
Fair Value$115.48$172.20$282.91
Upside / Downside0.78%50.27%146.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,695.301,801.171,913.652,033.152,160.122,295.012,363.86
Payout Ratio66.21%70.97%75.72%80.48%85.24%90.00%92.50%
Projected Dividends (M)1,122.401,278.201,449.091,636.331,841.312,065.512,186.57

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.24%6.24%7.24%
Year 1 PV (M)1,160.581,171.611,182.64
Year 2 PV (M)1,194.671,217.481,240.51
Year 3 PV (M)1,224.901,260.151,296.07
Year 4 PV (M)1,251.501,299.751,349.38
Year 5 PV (M)1,274.701,336.421,400.51
PV of Terminal Value (M)22,128.7923,200.2624,312.84
Equity Value (M)28,235.1529,485.6730,781.94
Shares Outstanding (M)320.78320.78320.78
Fair Value$88.02$91.92$95.96
Upside / Downside-23.19%-19.78%-16.26%

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