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Here’s Why You Should Stay Invested in WEC Energy (WEC) (Revised)


WEC Energy Group WEC is a consistent performer with capital investments, to reinforce infrastructure and expand customer base, reaping rewards. Efficient management and skillful execution of plans have culminated in robust results, the best part being better-than-guided earnings for 12 years nonstop.

The average positive earnings surprise of 3.08% for the trailing four quarters should encourage investors as would a 1.5% upward revision in the Zacks Consensus Estimate for fourth-quarter 2017 to 66 cents, in the last 30 days.

WEC Energy projects capital expenditure of nearly $11.8 billion over 2018-2022. Of this, $5,514 million is allotted for Gas Delivery, $2,707 million for Electric Delivery, $2,691 million for Generation and $911 million for Energy Infrastructure. Since, more than 99% of the company’s earnings are generated from regulated operations, rate hikes give it the confidence to spend on infrastructure development and power to boost earnings.

More good news comes from a swelling customer base thanks to the economy, which is gaining health. In third-quarter 2017, WEC Energy served 9,000 more electric and 18,000 more natural gas customers than it did in the year-ago quarter.

Strong investment-grade credit ratings between A and A-, allows WEC Energy to enjoy superior credit worthiness. This, in turn, gives it access to cheaper funds for investment projects amid rising interest rates.

Now, the company’s resolve is not just limited to its profits and performance. Its shareholder and environmental friendly ways are also worth mentioning. In December 2017, the company hiked its annual dividend rate by 6.25% to $2.21 from the 2016 level of $2.08. Also, it aims to cut down its emission in the state of Wisconsin nearly 40% below the 2005 levels by 2030. Timely completion of its ongoing capital projects, which are presently running per plan, holds the key to achieving this target.

Price Movement

The WEC Energy stock has gained 11.9% in the last 12 months, outperforming the 5.5% growth of the Zacks Electric Power industry.

The strong performance reflects the benefits of cost-saving initiatives, ongoing investments in infrastructure projects, and a gradual improvement in the economy in its service areas.

Zacks Rank

Lack of earnings estimate revisions for 2017 and 2018 has currently resulted in a Zacks Rank #3 (Hold) for WEC Energy. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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(We are reissuing this article to correct a mistake. The original article, issued on Jan 3, 2018, should no longer be relied upon.)

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