Intrinsic value of WEC Energy Group - WEC

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$60.30

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$60.30

 
Intrinsic value

$59.52

 
Up/down potential

-1%

 
Rating

hold

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of WEC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 19.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  26.09
  6.20
  6.08
  5.97
  5.87
  5.79
  5.71
  5.64
  5.57
  5.52
  5.46
  5.42
  5.38
  5.34
  5.31
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
Revenue, $m
  7,424
  7,935
  8,418
  8,920
  9,444
  9,991
  10,561
  11,157
  11,779
  12,429
  13,108
  13,818
  14,561
  15,338
  16,152
  17,004
  17,896
  18,831
  19,810
  20,836
  21,912
  23,039
  24,221
  25,461
  26,761
  28,125
  29,555
  31,056
  32,631
  34,283
  36,016
Variable operating expenses, $m
 
  5,702
  6,031
  6,373
  6,729
  7,101
  7,489
  7,894
  8,317
  8,759
  9,221
  9,399
  9,905
  10,434
  10,987
  11,567
  12,174
  12,809
  13,475
  14,173
  14,905
  15,672
  16,476
  17,320
  18,204
  19,132
  20,105
  21,125
  22,196
  23,320
  24,499
Fixed operating expenses, $m
 
  426
  437
  448
  459
  471
  482
  494
  507
  520
  533
  546
  559
  573
  588
  602
  618
  633
  649
  665
  682
  699
  716
  734
  752
  771
  791
  810
  831
  851
  873
Total operating expenses, $m
  5,790
  6,128
  6,468
  6,821
  7,188
  7,572
  7,971
  8,388
  8,824
  9,279
  9,754
  9,945
  10,464
  11,007
  11,575
  12,169
  12,792
  13,442
  14,124
  14,838
  15,587
  16,371
  17,192
  18,054
  18,956
  19,903
  20,896
  21,935
  23,027
  24,171
  25,372
Operating income, $m
  1,682
  1,806
  1,950
  2,100
  2,256
  2,420
  2,590
  2,768
  2,955
  3,150
  3,354
  3,873
  4,097
  4,331
  4,577
  4,835
  5,105
  5,388
  5,686
  5,998
  6,325
  6,668
  7,029
  7,408
  7,805
  8,222
  8,660
  9,120
  9,604
  10,111
  10,644
EBITDA, $m
  2,445
  2,441
  2,605
  2,776
  2,954
  3,140
  3,335
  3,538
  3,750
  3,972
  4,205
  4,448
  4,703
  4,970
  5,250
  5,543
  5,850
  6,173
  6,511
  6,865
  7,237
  7,628
  8,038
  8,468
  8,919
  9,393
  9,891
  10,414
  10,962
  11,539
  12,144
Interest expense (income), $m
  412
  406
  459
  514
  571
  630
  692
  756
  824
  894
  968
  1,045
  1,125
  1,209
  1,297
  1,389
  1,486
  1,587
  1,693
  1,804
  1,920
  2,041
  2,169
  2,303
  2,443
  2,591
  2,745
  2,907
  3,077
  3,255
  3,442
Earnings before tax, $m
  1,507
  1,401
  1,491
  1,586
  1,686
  1,790
  1,898
  2,012
  2,131
  2,256
  2,387
  2,828
  2,972
  3,122
  3,280
  3,445
  3,619
  3,802
  3,993
  4,194
  4,405
  4,627
  4,860
  5,105
  5,362
  5,632
  5,915
  6,213
  6,527
  6,856
  7,202
Tax expense, $m
  567
  378
  403
  428
  455
  483
  513
  543
  575
  609
  644
  764
  802
  843
  886
  930
  977
  1,026
  1,078
  1,132
  1,189
  1,249
  1,312
  1,378
  1,448
  1,521
  1,597
  1,678
  1,762
  1,851
  1,945
Net income, $m
  940
  1,023
  1,088
  1,158
  1,231
  1,306
  1,386
  1,469
  1,556
  1,647
  1,742
  2,064
  2,169
  2,279
  2,394
  2,515
  2,642
  2,775
  2,915
  3,062
  3,216
  3,378
  3,548
  3,726
  3,914
  4,111
  4,318
  4,536
  4,765
  5,005
  5,257

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  38
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  30,123
  31,997
  33,942
  35,969
  38,083
  40,287
  42,586
  44,987
  47,495
  50,115
  52,854
  55,718
  58,713
  61,848
  65,129
  68,564
  72,162
  75,930
  79,879
  84,017
  88,354
  92,900
  97,667
  102,666
  107,908
  113,407
  119,175
  125,226
  131,575
  138,236
  145,226
Adjusted assets (=assets-cash), $m
  30,085
  31,997
  33,942
  35,969
  38,083
  40,287
  42,586
  44,987
  47,495
  50,115
  52,854
  55,718
  58,713
  61,848
  65,129
  68,564
  72,162
  75,930
  79,879
  84,017
  88,354
  92,900
  97,667
  102,666
  107,908
  113,407
  119,175
  125,226
  131,575
  138,236
  145,226
Revenue / Adjusted assets
  0.247
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
Average production assets, $m
  2,082
  2,214
  2,349
  2,489
  2,635
  2,788
  2,947
  3,113
  3,286
  3,468
  3,657
  3,855
  4,062
  4,279
  4,506
  4,744
  4,993
  5,254
  5,527
  5,813
  6,113
  6,428
  6,758
  7,104
  7,466
  7,847
  8,246
  8,665
  9,104
  9,565
  10,049
Working capital, $m
  -263
  762
  808
  856
  907
  959
  1,014
  1,071
  1,131
  1,193
  1,258
  1,327
  1,398
  1,472
  1,551
  1,632
  1,718
  1,808
  1,902
  2,000
  2,104
  2,212
  2,325
  2,444
  2,569
  2,700
  2,837
  2,981
  3,133
  3,291
  3,458
Total debt, $m
  10,176
  11,475
  12,841
  14,264
  15,747
  17,294
  18,909
  20,594
  22,354
  24,194
  26,116
  28,127
  30,230
  32,430
  34,733
  37,145
  39,671
  42,316
  45,088
  47,993
  51,037
  54,229
  57,575
  61,084
  64,765
  68,625
  72,674
  76,922
  81,379
  86,055
  90,962
Total liabilities, $m
  21,163
  22,462
  23,828
  25,251
  26,734
  28,281
  29,896
  31,581
  33,341
  35,181
  37,103
  39,114
  41,217
  43,417
  45,720
  48,132
  50,658
  53,303
  56,075
  58,980
  62,024
  65,216
  68,562
  72,071
  75,752
  79,612
  83,661
  87,909
  92,366
  97,042
  101,949
Total equity, $m
  8,960
  9,535
  10,115
  10,719
  11,349
  12,005
  12,691
  13,406
  14,153
  14,934
  15,750
  16,604
  17,497
  18,431
  19,408
  20,432
  21,504
  22,627
  23,804
  25,037
  26,329
  27,684
  29,105
  30,594
  32,157
  33,795
  35,514
  37,317
  39,209
  41,194
  43,277
Total liabilities and equity, $m
  30,123
  31,997
  33,943
  35,970
  38,083
  40,286
  42,587
  44,987
  47,494
  50,115
  52,853
  55,718
  58,714
  61,848
  65,128
  68,564
  72,162
  75,930
  79,879
  84,017
  88,353
  92,900
  97,667
  102,665
  107,909
  113,407
  119,175
  125,226
  131,575
  138,236
  145,226
Debt-to-equity ratio
  1.136
  1.200
  1.270
  1.330
  1.390
  1.440
  1.490
  1.540
  1.580
  1.620
  1.660
  1.690
  1.730
  1.760
  1.790
  1.820
  1.840
  1.870
  1.890
  1.920
  1.940
  1.960
  1.980
  2.000
  2.010
  2.030
  2.050
  2.060
  2.080
  2.090
  2.100
Adjusted equity ratio
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  940
  1,023
  1,088
  1,158
  1,231
  1,306
  1,386
  1,469
  1,556
  1,647
  1,742
  2,064
  2,169
  2,279
  2,394
  2,515
  2,642
  2,775
  2,915
  3,062
  3,216
  3,378
  3,548
  3,726
  3,914
  4,111
  4,318
  4,536
  4,765
  5,005
  5,257
Depreciation, amort., depletion, $m
  763
  635
  655
  676
  698
  721
  744
  769
  795
  822
  850
  575
  606
  639
  673
  708
  745
  784
  825
  868
  912
  959
  1,009
  1,060
  1,114
  1,171
  1,231
  1,293
  1,359
  1,428
  1,500
Funds from operations, $m
  2,086
  1,658
  1,744
  1,834
  1,928
  2,027
  2,130
  2,238
  2,351
  2,469
  2,593
  2,640
  2,776
  2,918
  3,067
  3,223
  3,387
  3,559
  3,740
  3,929
  4,128
  4,337
  4,556
  4,787
  5,028
  5,282
  5,549
  5,829
  6,123
  6,432
  6,757
Change in working capital, $m
  -18
  44
  46
  48
  50
  52
  55
  57
  60
  62
  65
  68
  71
  75
  78
  82
  86
  90
  94
  99
  103
  108
  113
  119
  125
  131
  137
  144
  151
  159
  166
Cash from operations, $m
  2,104
  2,872
  1,697
  1,786
  1,878
  1,975
  2,075
  2,181
  2,291
  2,407
  2,527
  2,572
  2,704
  2,843
  2,989
  3,141
  3,302
  3,470
  3,646
  3,831
  4,025
  4,229
  4,443
  4,668
  4,903
  5,151
  5,412
  5,685
  5,972
  6,274
  6,591
Maintenance CAPEX, $m
  0
  -311
  -330
  -351
  -371
  -393
  -416
  -440
  -465
  -490
  -518
  -546
  -575
  -606
  -639
  -673
  -708
  -745
  -784
  -825
  -868
  -912
  -959
  -1,009
  -1,060
  -1,114
  -1,171
  -1,231
  -1,293
  -1,359
  -1,428
New CAPEX, $m
  -1,424
  -132
  -135
  -140
  -146
  -152
  -159
  -166
  -174
  -181
  -189
  -198
  -207
  -217
  -227
  -238
  -249
  -261
  -273
  -286
  -300
  -315
  -330
  -346
  -363
  -380
  -399
  -419
  -439
  -461
  -484
Cash from investing activities, $m
  -1,270
  -443
  -465
  -491
  -517
  -545
  -575
  -606
  -639
  -671
  -707
  -744
  -782
  -823
  -866
  -911
  -957
  -1,006
  -1,057
  -1,111
  -1,168
  -1,227
  -1,289
  -1,355
  -1,423
  -1,494
  -1,570
  -1,650
  -1,732
  -1,820
  -1,912
Free cash flow, $m
  834
  2,429
  1,232
  1,295
  1,360
  1,429
  1,500
  1,575
  1,653
  1,735
  1,820
  1,828
  1,922
  2,020
  2,123
  2,231
  2,345
  2,464
  2,589
  2,720
  2,857
  3,002
  3,154
  3,313
  3,481
  3,656
  3,841
  4,036
  4,240
  4,454
  4,680
Issuance/(repayment) of debt, $m
  -141
  1,337
  1,366
  1,423
  1,483
  1,547
  1,614
  1,685
  1,760
  1,839
  1,923
  2,010
  2,103
  2,201
  2,303
  2,412
  2,526
  2,646
  2,772
  2,905
  3,045
  3,192
  3,346
  3,509
  3,680
  3,860
  4,049
  4,248
  4,457
  4,676
  4,907
Issuance/(repurchase) of shares, $m
  -66
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -221
  1,337
  1,366
  1,423
  1,483
  1,547
  1,614
  1,685
  1,760
  1,839
  1,923
  2,010
  2,103
  2,201
  2,303
  2,412
  2,526
  2,646
  2,772
  2,905
  3,045
  3,192
  3,346
  3,509
  3,680
  3,860
  4,049
  4,248
  4,457
  4,676
  4,907
Total cash flow (excl. dividends), $m
  613
  3,766
  2,598
  2,718
  2,844
  2,976
  3,115
  3,260
  3,413
  3,574
  3,743
  3,838
  4,025
  4,220
  4,426
  4,643
  4,870
  5,109
  5,360
  5,624
  5,902
  6,194
  6,500
  6,822
  7,161
  7,517
  7,890
  8,283
  8,696
  9,130
  9,586
Retained Cash Flow (-), $m
  -275
  -575
  -580
  -604
  -630
  -657
  -685
  -715
  -747
  -781
  -816
  -853
  -893
  -934
  -978
  -1,024
  -1,072
  -1,123
  -1,177
  -1,233
  -1,292
  -1,355
  -1,421
  -1,490
  -1,562
  -1,639
  -1,719
  -1,803
  -1,892
  -1,985
  -2,083
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,190
  2,018
  2,114
  2,214
  2,319
  2,429
  2,545
  2,666
  2,793
  2,927
  2,985
  3,132
  3,286
  3,449
  3,619
  3,798
  3,986
  4,184
  4,391
  4,609
  4,839
  5,079
  5,333
  5,598
  5,878
  6,172
  6,480
  6,805
  7,145
  7,503
Discount rate, %
 
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
 
  2,949
  1,711
  1,630
  1,541
  1,442
  1,337
  1,227
  1,113
  998
  884
  752
  648
  551
  461
  379
  306
  243
  188
  143
  107
  78
  55
  38
  26
  17
  11
  6
  4
  2
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

WEC Energy Group, Inc., through its subsidiaries, generates and distributes electric energy. The company operates through Wisconsin, Illinois, Other States, electric transmission, and We Power, Corporate and Other segments. It generates electricity from coal, natural gas, oil, hydroelectric, wind, and biomass. The company provides electric utility services to customers in the mining, paper, foundry, food products, and machinery production industries, as well as to health services, governmental, and large retail chains. It also provides retail natural gas distribution services in the state of Wisconsin, as well as transports customer-owned natural gas; and generates, distributes, and sells steam. The company serves approximately 1.6 million electric customers and 2.8 million natural gas customers. In addition, it invests in and develops real estate, including business parks and other commercial real estate projects primarily in southeastern Wisconsin. The company was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in June 2015. WEC Energy Group, Inc. was founded in 1981 and is headquartered in Milwaukee, Wisconsin.

FINANCIAL RATIOS  of  WEC Energy Group (WEC)

Valuation Ratios
P/E Ratio 20.2
Price to Sales 2.5
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 9
Price to Free Cash Flow 28
Growth Rates
Sales Growth Rate 26.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12.5%
Cap. Spend. - 3 Yr. Gr. Rate 15.7%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 102.2%
Total Debt to Equity 113.6%
Interest Coverage 5
Management Effectiveness
Return On Assets 4%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 4.9%
Ret/ On T. Cap. - 3 Yr. Avg. 5.2%
Return On Equity 10.7%
Return On Equity - 3 Yr. Avg. 11.3%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 35.9%
EBITDA Margin - 3 Yr. Avg. 33.9%
Operating Margin 22.5%
Oper. Margin - 3 Yr. Avg. 22%
Pre-Tax Margin 20.2%
Pre-Tax Margin - 3 Yr. Avg. 19.1%
Net Profit Margin 12.6%
Net Profit Margin - 3 Yr. Avg. 11.7%
Effective Tax Rate 37.6%
Eff/ Tax Rate - 3 Yr. Avg. 38.7%
Payout Ratio 66.5%

WEC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WEC stock intrinsic value calculation we used $7472 million for the last fiscal year's total revenue generated by WEC Energy Group. The default revenue input number comes from 2016 income statement of WEC Energy Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WEC stock valuation model: a) initial revenue growth rate of 6.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.2%, whose default value for WEC is calculated based on our internal credit rating of WEC Energy Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of WEC Energy Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WEC stock the variable cost ratio is equal to 72.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $416 million in the base year in the intrinsic value calculation for WEC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4% for WEC Energy Group.

Corporate tax rate of 27% is the nominal tax rate for WEC Energy Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WEC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WEC are equal to 27.9%.

Life of production assets of 6.7 years is the average useful life of capital assets used in WEC Energy Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WEC is equal to 9.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8960 million for WEC Energy Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 316.675 million for WEC Energy Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of WEC Energy Group at the current share price and the inputted number of shares is $19.1 billion.


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COMPANY NEWS

▶ Wisconsin Electric declares quarterly dividends   [Apr-20-17 02:17PM  PR Newswire]
▶ Buy Alert: 2 Cheap Funds Paying 6.7%+   [Mar-29-17 07:42AM  at Forbes]
▶ $178 billion in profits, no taxes paid   [Mar-09-17 02:55PM  at bizjournals.com]
▶ WEC Energy misses 4Q profit forecasts   [07:28AM  Associated Press]
▶ How Is WEC Energy Valued Compared to Its Peers?   [Jan-25-17 12:05PM  Market Realist]
▶ WEC Energy Group raises quarterly dividend   [Jan-19-17 02:35PM  PR Newswire]
▶ Is WEC Energy Group Inc (WEC) A Good Stock To Buy Right Now?   [Dec-04-16 08:47PM  at Insider Monkey]
▶ WEC Energy Group announces plan to increase dividend   [Dec-01-16 04:05PM  PR Newswire]
▶ WEC Energy Group declares quarterly dividend   [Oct-20-16 03:25PM  PR Newswire]
Stock chart of WEC Financial statements of WEC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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