MGE Energy, Inc. – Value Analysis (NASDAQ:MGEE) : August 19, 2017

Capitalcube gives MGE Energy, Inc. a score of 66.

Our analysis is based on comparing MGE Energy, Inc. with the following peers – DTE Energy Company, CMS Energy Corporation, Alliant Energy Corp, Xcel Energy Inc., WEC Energy Group Inc, American Electric Power Company, Inc., Ameren Corporation, ALLETE, Inc. and Otter Tail Corporation (DTE-US, CMS-US, LNT-US, XEL-US, WEC-US, AEP-US, AEE-US, ALE-US and OTTR-US).

Investment Outlook

MGE Energy, Inc. has a fundamental score of 66 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on MGE Energy, Inc.

Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • It currently trades at a Price/Book ratio of (2.97).
  • The market expects MGEE-US to grow faster than its peers and for the company to improve its current ROE.
  • MGEE-US has relatively high profit margins while operating with median asset turns.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • MGEE-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While MGEE-US‘s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • MGEE-US has the financial and operating capacity to borrow quickly.

Access our research and ratings on MGE Energy, Inc.

Leverage & Liquidity

MGEE-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 15.65% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 36.46%), and a well-cushioned interest coverage level of 6.86x, MGEE-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 9 peers for the company have an outstanding debt balance.

MGEE-US has maintained its Quick & Able profile from the recent year-end.

  • MGEE-US‘s interest coverage is similar to last year’s high of 7.09x, which compares to a low of 6.44x in 2014.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (6.86x) and the peer median (3.48x).
  • MGEE-US‘s debt-EV is similar to last year’s low of 15.17%, which compares to the 2012 high of 24.22%.
  • Like the interest coverage trend, debt-EV has remained relatively stable for both the company (15.65%) and the peer median (36.46%).
  • Relative to peers, debt-EV rose 0.69 percentage points. Unlike the peer median, it is also below the 25% leverage benchmark.

Access the detailed analysis for MGE Energy, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
DTE Energy Company 38.72 0.96 3.01 19.52
CMS Energy Corporation 44.27 1.05 2.95 16.83
Alliant Energy Corp 33.29 0.67 3.12 24.03
Xcel Energy Inc. 39.91 0.75 3.42 22.03
WEC Energy Group Inc 34.68 0.64 4.25 20.14
American Electric Power Company, Inc. 38.96 0.45 3.54 20.34
Ameren Corporation 38.23 0.57 3.82 25.41
ALLETE, Inc. 29.88 1.08 3.32 24.31
Otter Tail Corporation 27.38 0.93 3.85 27.58
MGE Energy, Inc. 15.65 2.98 6.86 33.96
Peer Median 36.46 0.84 3.48 23.03
Best In Class 15.65 2.98 6.86 33.96

Looking for more metrics and analysis for MGE Energy, Inc.?

Company Profile

MGE Energy, Inc. provides natural gas and electric services. The company operates its business through the following segments: Regulated Electric Utility Operations, Regulated Gas Utility Operations, Non-Regulated Energy Operations, Transmission Investments and All Other. The Regulated Electric Utility Operations segment engages in generating, purchasing, and distributing electricity. The Regulated Gas Utility Operations segment engages in purchasing and distributing natural gas. The Non-Regulated Energy Operations segment engages in owning and leasing electric generating capacity. The Transmission Investments segment represents investment in American Transmission Company LLC, a company engaged in the business of providing electric transmission services primarily in Wisconsin. The All Other segment invests in companies and property that relate to the regulated operations and financing the regulated operations. MGE Energy was founded in 2001 and is headquartered in Madison, WI.


The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website