Critical Comparison: WEC Energy Group (WEC) and Calpine (CPN)
Calpine (NYSE: CPN) and WEC Energy Group (NYSE:WEC) are both mid-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.
Valuation & Earnings
This table compares Calpine and WEC Energy Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Calpine||$6.72 billion||0.81||$92.00 million||($0.07)||-216.25|
|WEC Energy Group||$7.47 billion||2.87||$940.20 million||$3.04||22.34|
WEC Energy Group has higher revenue and earnings than Calpine. Calpine 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.
WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.1%. Calpine does not pay a dividend. WEC Energy Group pays out 68.4% of its earnings in the form of a dividend. Calpine has raised its dividend for 6 consecutive years.
Insider & Institutional Ownership
86.0% of Calpine shares are held by institutional investors. Comparatively, 72.6% of WEC Energy Group shares are held by institutional investors. 1.2% of Calpine shares are held by insiders. Comparatively, 1.0% of WEC Energy Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Calpine 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||12.79%||10.62%||3.18%|
This is a breakdown of recent recommendations for Calpine 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||0||0||1.88|
Calpine currently has a consensus target price of $14.86, suggesting a potential downside of 1.84%. WEC Energy Group has a consensus target price of $64.71, suggesting a potential downside of 4.71%. Given Calpine’s stronger consensus rating and higher possible upside, equities analysts plainly believe Calpine is more favorable than WEC Energy Group.
Risk & Volatility
Calpine has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.
Calpine Company Profile
Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.
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.
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