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WEC Energy Group: Well Positioned For A Recession, But The Stock Is Not Cheap

Aug. 31, 2023 4:57 PM ETWEC Energy Group, Inc. (WEC)CMS, DTE, ES, EXC5 Comments


  • WEC Energy Group, Inc. is a stable utility company with a 3.66% dividend yield, making it attractive during a potential recession.
  • The company has a large customer base and stable cash flows, providing resilience in economic downturns.
  • WEC Energy Group plans to invest in its rate base to drive future growth, but its projected earnings growth rate is lower than historical levels.
  • The company has a stronger balance sheet than many of its peers, which positions it better than some other companies in a high-rate environment.
  • The stock is at best fairly valued, but it could very easily be overvalued relative to its peers. As such, it is not a discount buy right now.
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WEC Energy Group, Inc. (NYSE:WEC) is a regulated electric and natural gas utility that primarily serves Wisconsin and the surrounding states:

The company’s service territory also includes the third-largest city in the United States (Chicago, Illinois), although

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Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

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Comments (5)

Sambo Neube profile picture
WEC is getting killed, should see 7x soon
navyair profile picture
Investor since I received 5 shares as a wedding gift from my FIL in 1986. He was VP for Nuke Power for WEC then. Kept everything and dripped it, plus added the occasional cash gift or raise to the mix. Own close to 5,000 shares today, mostly in the 25-$35 range. Will never sell unless we need it for long term care self-insurance. However, fairly pricey now, and may shift over to cash dividends vice DRIP, now that they charge for the DRIP.
I have also been a shareholder of WEC since 2021 as I am now looking to retire in about 4 years at 59 and had been looking for a dividend stock that would increase both the price and the dividend. I got in at $95. WEC also seems a bit expensive to me given the higher interest rate environment. I've been looking at the P/E since 1980 and come to the conclusion that as of 2019 they are actually very expensive. That's probably why the sideways range from about 80 to about 108. I don't expect the price to rise until 2025, but after that the valuation should be back in a range where the price could pick up again. Provided, of course, that the management continues to work so well.
@gherbst2017 I totally agree with the possible exception of recession; 50/50 bet imho today. Regarding WEC sp, usually is range bound between $80 - low $100 as you stated. Having invested and sold the stock a couple of times, I've always regretted selling this well managed utility company and its nice DGI. I am a buyer today, I feel comfortable in this range, / whenever the sp is below $85 and a strong buyer below $80. Happy investing!
What recession?
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