Reviewing WEC Energy Group (NYSE:WEC) and Alliant Energy (NYSE:LNT)

WEC Energy Group (NYSE:WEC) and Alliant Energy (NASDAQ:LNT) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Volatility and Risk

WEC Energy Group has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500. Comparatively, Alliant Energy has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Earnings and Valuation

This table compares WEC Energy Group and Alliant Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WEC Energy Group $7.52 billion 4.18 $1.14 billion $3.58 27.87
Alliant Energy $3.65 billion 3.80 $567.40 million $2.31 24.03

WEC Energy Group has higher revenue and earnings than Alliant Energy. Alliant 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 Alliant Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WEC Energy Group 16.26% 11.36% 3.37%
Alliant Energy 18.37% 12.30% 3.88%

Analyst Ratings

This is a summary of current ratings and recommmendations for WEC Energy Group and Alliant Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WEC Energy Group 4 4 3 0 1.91
Alliant Energy 0 2 1 0 2.33

WEC Energy Group presently has a consensus target price of $90.91, suggesting a potential downside of 8.87%. Alliant Energy has a consensus target price of $54.50, suggesting a potential downside of 1.84%. Given Alliant Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Alliant Energy is more favorable than WEC Energy Group.

Insider and Institutional Ownership

73.1% of WEC Energy Group shares are held by institutional investors. Comparatively, 74.4% of Alliant Energy shares are held by institutional investors. 0.3% of WEC Energy Group shares are held by insiders. Comparatively, 0.3% of Alliant Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

WEC Energy Group pays an annual dividend of $2.53 per share and has a dividend yield of 2.5%. Alliant Energy pays an annual dividend of $1.52 per share and has a dividend yield of 2.7%. WEC Energy Group pays out 70.7% of its earnings in the form of a dividend. Alliant Energy pays out 65.8% 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 increased its dividend for 1 consecutive years and Alliant Energy has increased its dividend for 1 consecutive years. Alliant Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Alliant Energy beats WEC Energy Group on 9 of the 16 factors compared between the two stocks.

About WEC Energy Group

WEC Energy Group, Inc., through its subsidiaries, provides regulated natural gas and electricity, and nonregulated renewable energy services in the United States. The company operates through six segments: Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure, and Corporate and Other. It generates and distributes electricity from coal, natural gas, oil, hydroelectric, wind, and biomass sources; provides electricity transmission services; offers retail natural gas distribution services; transports natural gas; and generates, distributes, and sells steam. The company offers electricity to approximately 1.6 million residential, small and large commercial and industrial, and other customers; and natural gas to 2.9 million residential, and commercial and industrial customers. As of December 31, 2019, it operated approximately 36,500 miles of overhead distribution lines and 34,100 miles of underground distribution cable, as well as approximately 500 distribution substations and 503,200 line transformers; and approximately 49,500 miles of natural gas distribution mains, as well as 1,200 miles of natural gas transmission mains. The company was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in June 2015. WEC Energy Group, Inc. was incorporated in 1981 and is headquartered in Milwaukee, Wisconsin.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the Midwest region of the United States. It operates through three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. As of December 31, 2019, IPL supplied electricity to 490,000 retail customers and natural gas to 225,000 retail customers; and WPL supplied electricity to 480,000 retail customers and natural gas to 195,000 retail customers. It offers electric utility services to retail customers in the farming, agriculture, industrial manufacturing, chemical, and packaging industries. In addition, the company holds investments in various businesses, which provide freight services through a short-line railway between Cedar Rapids and Iowa City, Iowa; a barge terminal and hauling services on the Mississippi River; customized supply chain solutions; freight and logistics brokering services; and other transfer and storage services. Further, it owns a 347 megawatt (MW) natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a 225 MW wind farm located in Oklahoma. Alliant Energy Corporation was founded in 1917 and is headquartered in Madison, Wisconsin.

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