MGE Energy Inc (MGEE) stock analysis

P/E below its 5-year median

MGE Energy's P/E of 19.5 is below its own 5-year median of 24.7.

P/E below the industry

MGE Energy's P/E of 19.5 is below the Electric, Gas, and Sanitary Services median of 20.2.

EV/EBITDA below its 5-year median

MGE Energy's EV/EBITDA of 23.2 is below its 5-year median of 25.0.

P/B above the industry

MGE Energy's price-to-book of 2.09 is above the Electric, Gas, and Sanitary Services median of 1.96.

Trading above fair value

The share price of $79.53 is above our fair value estimate of $78.40.

Margin of safety under 20%

The price is 1.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 1.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 6.6% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 14.2% over the last twelve months, against a 5-year average of 8.0% a year.

Growing slower than the industry

Revenue grew 7.1% over the last twelve months; the Electric, Gas, and Sanitary Services median is 7.7%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 11.0% over the last twelve months and averaged 10.5% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 6.1%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

MGE Energy's return on equity of 11.0% is above the Electric, Gas, and Sanitary Services median of 9.4%.

Earnings grew over 5 years

Net income grew 8.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 19.5% over the last twelve months, against a 5-year average of 17.2%.

Net margin above the industry

MGE Energy's net margin of 19.5% is above the Electric, Gas, and Sanitary Services median of 11.1%.

High debt

Debt is 64.9% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 59.1% five years ago to 64.9%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 29.8% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.14 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.38; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

MGE Energy paid dividends worth 2.4% of the share price over the last twelve months.

Yield below Treasuries

The 2.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; MGE Energy yields 2.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 46.8% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.