WEC, WEC Energy Group, Inc.
We do not expect this to have an impact on our liquidity as we currently believe that our cash and cash equivalents, our available capacity under existing revolving credit facilities, cash generated from ongoing operations, and access to the capital markets are adequate to meet our short-term…
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A capital-intensive business, run on heavy physical assets that have to be kept working.
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 0 of 9 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the 10-K is where you look.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $7.5B | $7.6B | $7.7B | $7.5B | $7.2B | $8.3B | $9.6B | $8.9B | $8.6B | $9.8B | $10.1B |
| Operating marginOp. mgn | 22.7% | 23.2% | 19.1% | 20.4% | 23.6% | 20.6% | 20.0% | 21.5% | 25.0% | 22.9% | 22.7% |
| Net incomeNet inc. | $939M | $1.2B | $1.1B | $1.1B | $1.2B | $1.3B | $1.4B | $1.3B | $1.5B | $1.6B | $1.6B |
| EPS (diluted)EPS | $2.96 | $3.79 | $3.34 | $3.58 | $3.79 | $4.11 | $4.45 | $4.22 | $4.83 | $4.81 | $4.99 |
| Owner earningsOwner earn. | $680M | $119M | $28M | ($184M) | ($678M) | ($340M) | ($636M) | — | — | — | $738M |
| ROICROIC | 6% | 7% | — | 6% | 6% | 6% | 6% | 6% | 6% | 6% | 6% |
| CapexCapex | $1.4B | $2.0B | $2.4B | $2.5B | $2.9B | $2.4B | $2.7B | — | — | — | $2.7B |
| Capex / revenueCapex/rev | 19.1% | 25.6% | 31.5% | 33.6% | 39.7% | 28.5% | 28.1% | — | — | — | 26.7% |
| Capex vs depreciationCapex/dep | 1.87× | 2.45× | 2.86× | 2.73× | 2.95× | 2.21× | 2.40× | — | — | — | 1.80× |
| Total debtDebt | $9.4B | $9.6B | $10.4B | $11.9B | $12.5B | $13.6B | $15.5B | $16.6B | $18.9B | $20.0B | $19.9B |
| Cash & investmentsCash+inv | $38M | $39M | $85M | $38M | $25M | $16M | $29M | $43M | $10M | $28M | $46M |
| Net debt / (cash)Net debt | $9.3B | $9.6B | $10.3B | $11.8B | $12.4B | $13.5B | $15.4B | $16.6B | $18.9B | $20.0B | $19.9B |
Owner’s Scorecard
Will it survive?
- AdequateOperating income $2.2B ÷ interest expense $895M
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- HighTotal debt $20.0B ÷ operating income $2.2B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $20.0BHeavy net debtCash $28M − debt $20.0B
Netting $28M of cash and short-term investments against $20.0B of debt leaves $20.0B owed, about 8.9× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Negative, funded by othersDSO 77 + DIO 0 − DPO 127 days
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)
Is it a good business?
- Below averageNOPAT $2.1B ÷ invested capital $34.0B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $683M = operating cash $3.4B − capex $2.7B
What an owner could take out without starving the business. That's 7% of revenue. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $3.4B ÷ net income $1.6B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns most of itDividends + buybacks $1.1B ÷ Owner Earnings $683M
Of $683M Owner Earnings, $1.1B (168%) went back to shareholders, $1.1B dividends, $1M buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.82×ExpandingCapex $2.7B ÷ depreciation $1.5B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 9 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 23% (FY2016) → 23% (FY2025)
Margins held roughly steady across the record.
- Reinvestment, incremental ROIC 6%
Reinvested capital earned only a modest return, growth is getting expensive.
- Worst year 2018 · 19.1% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +0.2%/yr
Roughly flat share count, little dilution, little buyback.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $24.9B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$16.3B · 65%
- Dividends$8.5B · 34%
- Buybacks$614M · 2%
It reinvested $16.3B (65%) back into the business and returned $9.1B (37%) to owners, $8.5B in dividends, $614M in buybacks. Total debt rose $10.6B across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $9.8B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.59×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $20.0B vs ($2.3B) WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +38%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $4.81/share and book value $43.40/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what WEC Energy Group, Inc. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $738M on 328M diluted shares; net debt $19.9B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationBusiness
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“At December 31, 2025, Michigan law limited customer choice to 10% of an electric utility's Michigan retail load.”
From the recordRevenue exposed (TTM)$10.1B - Pricing power & competitionMD&A
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Decreases in the retail prices of electricity supplied by traditional utilities or the pricing of other clean energy sources in the regions where our non-utility renewable energy facilities are located could harm our ability to offer competitive pricing and to sign PPAs with customers.”
From the recordOperating margin22.7% now (TTM), off a 25.0% peak (FY2024) - Supplier & input dependenceRisk Factors
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“Cash collections from the environmental control charge and funds on deposit in trust accounts are the sole sources of funds to satisfy the debt obligation.”
From the recordGross-margin cushion (TTM)65% - Concentrated dependenceMD&A
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“The electricity produced and revenues generated by the wind generating facilities depend heavily on wind conditions, which are variable.”
From the recordOwner-earnings margin at stake (TTM)7% - Debt terms & refinancingBusiness
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“Debt Covenants Certain of our short-term and long-term debt agreements contain financial covenants that we must satisfy, including debt to capitalization ratios and debt service coverage ratios.”
From the recordBalance sheet (TTM)$20.0B heavy net debt · interest covered 2.5× - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“A $7.4 million increase in expense primarily associated with the favorable settlement of a legal claim during 2024.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandBusiness
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“In addition, any economic downturn or disruption of national or international markets could adversely affect the financial condition of our customers and demand for their products, which could affect their demand for our products.”
From the recordWorst year on record19.1% operating margin (FY2018)
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “The ability to achieve this goal depends on many external factors, including the ability to make operating refinements, the retirement of less efficient generating units, the development of relevant energy technologies, the use of RNG throughout our natural gas utility systems, the ability to procur…”
- “United States Department of Commerce Complaints Starting in June 2024, the DOC began applying duties to certain imports of solar cells from Malaysia, Vietnam, Thailand and Cambodia, with the potential for enhanced duties in certain circumstances, based on final findings by both the DOC and the USITC…”
- “See Factors Affecting Results, Liquidity, and Capital Resources Regulatory, Legislative, and Legal Matters United States Department of Commerce Complaints and Factors Affecting Results, Liquidity, and Capital Resources Regulatory, Legislative, and Legal Matters Uyghur Forced Labor Prevention Act for…”
- “Successful completion of these projects may be further influenced by changes in law or regulation, such as new legislation or regulation impacting large data center cost allocation or environmental compliance requirements, trade and tariff issues, including those associated with imported solar panel…”
- “Prior to the PSCW approving the tariffs, for infrastructure investments that have not received regulatory approval, WE requires VLCs to enter into payment and cancellation agreements which obligate the VLC to reimburse WE for all costs associated with projects, including any associated costs incurre…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Utilities
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| EDConsolidated Edison Inc | $17.0B | — | 17.2% | 5% | 2% |
| SRESempra | $12.4B | — | 32.8% | 5% | -49% |
| PEGPublic Service Enterprise Group Inc | $12.2B | 75% | 24.5% | 7% | 0% |
| XELXcel Energy Inc | $11.5B | 67% | 22.4% | 5% | -59% |
| WECWEC Energy Group, Inc. | $9.8B | 67% | 22.9% | 6% | 7% |
| AEEAmeren Corp | $8.8B | — | 23.0% | 6% | -9% |
| CMSCMS Energy Corp | $8.3B | — | 20.8% | 5% | -2% |
| NINisource Inc. | $6.5B | 76% | 28.1% | 6% | -6% |