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WEC Energy Driven by Integrys Deal & Systematic Investments
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On Aug 22, 2016, we issued an updated research report on WEC Energy Group, Inc. (WEC - Free Report) . WEC Energy Group’s decision to acquire Integrys has been beneficial for the company. Stringent environmental regulations, dependence on the performance of subsidiaries and regulatory mandates are, however, persistent headwinds.
Recently, WEC Energy reported second-quarter 2016 adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 55 cents by 3.6%. However, quarterly earnings were down from the year-ago figure by a penny.WEC Energy’s total revenue was $1,602 million, lagging the Zacks Consensus Estimate of $2,131 million by 24.8%.
Due to the integration of Integrys Energy, the company has projected earnings per share in the range of 55–59 cents per share for the third quarter and $2.88–$2.94 for the full year, signaling a full-year growth rate of 6% to 8%. The acquisition has been accretive to WEC Energy’s overall performance, adding $620 million to its top line in the second quarter.
The company expects annual earnings growth of 5% to 7%, beyond 2016, from over the 2015 level of $2.72, with over 99% of the bottom line to be derived from regulated operations. WEC Energy projects capital expenditure of $1.55 billion in 2016, with total capital investment of nearly $15 billion over the 2016–2025 timeframe. Out of this, $8,714 million is allocated for the Gas Delivery business, $4,337 million for the Electric Delivery segment and $2,875 million for the Generation business.
Despite investing substantially in the installation of pollution control equipment and in the conversion of fuel source to natural gas from coal and retiring certain units, coal still captures a major share of WEC Energy’s power generation mix. Even though the company lowered emission levels by 23% over the last 15 years, coal continue to account for 50% of the total power generated.
Moreover, the Environmental Protection Agency’s Clean Power Plan requires the state of Wisconsin to curb carbon emissions by 41% and two-thirds of this target must be achieved by 2022. The installation of low-emission infrastructure at its generation systems to meet regulatory compliance increases the cost of operations.
Zacks Rank & Key Picks
WEC Energy carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the utility space are Korea Electric Power Corp. (KEP - Free Report) , Spark Energy, Inc. and DTE Energy Company (DTE - Free Report) . Both Korea Electric and Spark Energy sport a Zacks Rank #1 (Strong Buy), while DTE Energy carries a Zacks Rank #2 (Buy).
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WEC Energy Driven by Integrys Deal & Systematic Investments
On Aug 22, 2016, we issued an updated research report on WEC Energy Group, Inc. (WEC - Free Report) . WEC Energy Group’s decision to acquire Integrys has been beneficial for the company. Stringent environmental regulations, dependence on the performance of subsidiaries and regulatory mandates are, however, persistent headwinds.
Recently, WEC Energy reported second-quarter 2016 adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 55 cents by 3.6%. However, quarterly earnings were down from the year-ago figure by a penny.WEC Energy’s total revenue was $1,602 million, lagging the Zacks Consensus Estimate of $2,131 million by 24.8%.
Due to the integration of Integrys Energy, the company has projected earnings per share in the range of 55–59 cents per share for the third quarter and $2.88–$2.94 for the full year, signaling a full-year growth rate of 6% to 8%. The acquisition has been accretive to WEC Energy’s overall performance, adding $620 million to its top line in the second quarter.
The company expects annual earnings growth of 5% to 7%, beyond 2016, from over the 2015 level of $2.72, with over 99% of the bottom line to be derived from regulated operations. WEC Energy projects capital expenditure of $1.55 billion in 2016, with total capital investment of nearly $15 billion over the 2016–2025 timeframe. Out of this, $8,714 million is allocated for the Gas Delivery business, $4,337 million for the Electric Delivery segment and $2,875 million for the Generation business.
WEC ENERGY GRP Price
WEC ENERGY GRP Price | WEC ENERGY GRP Quote
Despite investing substantially in the installation of pollution control equipment and in the conversion of fuel source to natural gas from coal and retiring certain units, coal still captures a major share of WEC Energy’s power generation mix. Even though the company lowered emission levels by 23% over the last 15 years, coal continue to account for 50% of the total power generated.
Moreover, the Environmental Protection Agency’s Clean Power Plan requires the state of Wisconsin to curb carbon emissions by 41% and two-thirds of this target must be achieved by 2022. The installation of low-emission infrastructure at its generation systems to meet regulatory compliance increases the cost of operations.
Zacks Rank & Key Picks
WEC Energy carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the utility space are Korea Electric Power Corp. (KEP - Free Report) , Spark Energy, Inc. and DTE Energy Company (DTE - Free Report) . Both Korea Electric and Spark Energy sport a Zacks Rank #1 (Strong Buy), while DTE Energy carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>