WEC Energy Group (NYSE: WEC) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.
Institutional and Insider Ownership
73.0% of WEC Energy Group shares are owned by institutional investors. Comparatively, 62.0% of OGE Energy shares are owned by institutional investors. 1.0% of WEC Energy Group shares are owned by company insiders. Comparatively, 0.5% of OGE Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
WEC Energy Group pays an annual dividend of $2.21 per share and has a dividend yield of 3.6%. OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.3%. WEC Energy Group pays out 58.3% of its earnings in the form of a dividend. OGE Energy pays out 69.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. WEC Energy Group has raised its dividend for 11 consecutive years and OGE Energy has raised its dividend for 7 consecutive years.
This is a breakdown of current recommendations and price targets for WEC Energy Group and OGE Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WEC Energy Group||1||7||1||0||2.00|
WEC Energy Group presently has a consensus target price of $67.25, suggesting a potential upside of 10.55%. OGE Energy has a consensus target price of $37.40, suggesting a potential upside of 20.41%. Given OGE Energy’s stronger consensus rating and higher possible upside, analysts plainly believe OGE Energy is more favorable than WEC Energy Group.
Risk & Volatility
WEC Energy Group has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.
Valuation & Earnings
This table compares WEC Energy Group and OGE Energy’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WEC Energy Group||$7.65 billion||2.51||$1.20 billion||$3.79||16.05|
|OGE Energy||$2.26 billion||2.75||$338.20 million||$1.91||16.26|
WEC Energy Group has higher revenue and earnings than OGE Energy. WEC Energy Group is trading at a lower price-to-earnings ratio than OGE Energy, indicating that it is currently the more affordable of the two stocks.
This table compares WEC Energy Group and OGE Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WEC Energy Group||15.75%||10.81%||3.24%|
OGE Energy beats WEC Energy Group on 10 of the 17 factors compared between the two stocks.
WEC Energy Group Company Profile
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
OGE Energy Company Profile
OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.
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