Head to Head Analysis: OGE Energy (OGE) & WEC Energy Group (WEC)

WEC Energy Group (NYSE: WEC) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for WEC Energy Group and OGE Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WEC Energy Group 1 7 1 0 2.00
OGE Energy 0 5 2 0 2.29

WEC Energy Group currently has a consensus target price of $67.25, suggesting a potential upside of 10.85%. OGE Energy has a consensus target price of $37.40, suggesting a potential upside of 24.01%. Given OGE Energy’s stronger consensus rating and higher possible upside, analysts clearly believe OGE Energy is more favorable than WEC Energy Group.

Earnings and Valuation

This table compares WEC Energy Group and OGE Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WEC Energy Group $7.65 billion 2.50 $1.20 billion $3.79 16.01
OGE Energy $2.26 billion 2.67 $338.20 million $1.91 15.79

WEC Energy Group has higher revenue and earnings than OGE Energy. OGE Energy is trading at a lower price-to-earnings ratio than WEC Energy Group, indicating that it is currently the more affordable of the two stocks.

Profitability

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 16.69% 10.92% 3.73%

Volatility and Risk

WEC Energy Group has a beta of 0.05, suggesting that its stock price is 95% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Institutional & Insider Ownership

73.1% of WEC Energy Group shares are held by institutional investors. Comparatively, 62.2% of OGE Energy shares are held by institutional investors. 1.0% of WEC Energy Group shares are held by insiders. Comparatively, 0.5% of OGE Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.4%. OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.4%. WEC Energy Group pays out 54.9% 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.

Summary

OGE Energy beats WEC Energy Group on 9 of the 17 factors compared between the two stocks.

About WEC Energy Group

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.

About OGE Energy

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.

Receive News & Ratings for WEC Energy Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for WEC Energy Group and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply