Data center electricity demand growth is a key source of upside for US utilities that we don't think the market appreciates. We consider the sector 9% undervalued as of April 8 in part because we expect electricity demand growth to top market expectations, requiring substantial energy infrastructure investment and boosting utilities' earnings growth.
Wisconsin, representing nearly two thirds of WEC Energy's business, is a favorable regulatory environment with a forward-looking test year and earned returns above the national average.
WEC Energy's large investment plan increases regulatory risk.
|
Metric
|
WEC
|
LNT
|
AEP
|
|---|---|---|---|
Price/Earnings (Normalized) | 17.89 | 17.94 | 16.48 |
Price/Book Value | 2.23 | 1.90 | 1.80 |
Price/Sales | 2.94 | 3.16 | 2.37 |
Price/Cash Flow | 9.40 | 9.40 | 7.86 |
|
Metric
|
WEC
|
LNT
|
AEP
|
|---|---|---|---|
Quick Ratio | 0.30 | 0.14 | 0.27 |
Current Ratio | 0.55 | 0.55 | 0.53 |
Interest Coverage | 3.11 | 2.79 | 2.22 |
|
Metric
|
WEC
|
LNT
|
AEP
|
|---|---|---|---|
Return on Assets (Normalized) | 3.40% | 3.46% | 2.26% |
Return on Equity (Normalized) | 12.56% | 10.95% | 8.82% |
Return on Invested Capital (Normalized) | 6.97% | 7.05% | 5.77% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
NEE
| NextEra Energy Inc | Mbspjspzw | Dfykp | $137.4 Bil | |
SO
| Southern Co | Gtnbvrtbc | Dmgkmch | $81.4 Bil | |
DUK
| Duke Energy Corp | Tbxktrwj | Qvztq | $76.4 Bil | |
NGG
| National Grid PLC ADR | Bvshzwc | Ghwn | $48.5 Bil | |
AEP
| American Electric Power Co Inc | Tjnphcdh | Fjhqd | $45.5 Bil | |
PCG
| PG&E Corp | Bwctbvh | Syhw | $44.6 Bil | |
D
| Dominion Energy Inc | Rfzwhpss | Nvyymv | $42.7 Bil | |
EXC
| Exelon Corp | Lwxkjygj | Kypnbwx | $37.7 Bil | |
PEG
| Public Service Enterprise Group Inc | Ssrwswn | Jkdtgp | $33.5 Bil | |
ED
| Consolidated Edison Inc | Mgdscfl | Nnpf | $32.5 Bil |
:quality(80)/s3.amazonaws.com/arc-authors/morningstar/689ab3b8-4029-4d7c-9975-43e4305e927a.jpg)