Analyzing OGE Energy (OGE) & WEC Energy Group (WEC)
OGE Energy (NYSE: OGE) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.
Earnings and Valuation
This table compares OGE Energy and WEC Energy Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OGE Energy||$2.26 billion||2.73||$338.20 million||$1.91||16.16|
|WEC Energy Group||$7.65 billion||2.53||$1.20 billion||$3.79||16.17|
Volatility & Risk
OGE Energy has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for OGE Energy and WEC Energy Group, 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 presently has a consensus price target of $37.40, suggesting a potential upside of 21.15%. WEC Energy Group has a consensus price target of $67.25, suggesting a potential upside of 9.74%. Given OGE Energy’s stronger consensus rating and higher possible upside, equities research analysts plainly believe OGE Energy is more favorable than WEC Energy Group.
This table compares OGE Energy and WEC Energy Group’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 pays an annual dividend of $1.33 per share and has a dividend yield of 4.3%. WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.4%. OGE Energy pays out 69.6% of its earnings in the form of a dividend. WEC Energy Group pays out 54.9% 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. OGE Energy has increased its dividend for 11 consecutive years and WEC Energy Group has increased its dividend for 7 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
62.0% of OGE Energy shares are held by institutional investors. Comparatively, 73.0% of WEC Energy Group shares are held by institutional investors. 0.5% of OGE Energy shares are held by company insiders. Comparatively, 1.0% of WEC Energy Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
OGE Energy beats WEC Energy Group on 10 of the 17 factors compared between the two stocks.
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.
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.
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