MGE Energy Misses Estimates in Q3

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MGE ($NASDAQ:MGEE) Energy is a diversified energy company based in Madison, Wisconsin. The company’s primary business is the generation, transmission and distribution of electricity, but it also owns and operates a natural gas utility and a variety of other businesses. MGE Energy‘s Q3 GAAP EPS of $0.93 missed estimates by $0.08, while revenue of $163.4M beat expectations by $24.23M. The miss on earnings was due to higher interest expense and a charge for the early retirement of debt. The charge for the early retirement of debt was $6 million.

Despite the miss on earnings, MGE Energy’s stock price was up slightly in after-hours trading on the news of the beat on revenue. This is likely due to the strong performance of the company’s natural gas utility, which was the primary driver of the beat on revenue.

Earnings

MGE Energy reported their earnings for the fiscal year 2022 second quarter on June 30. The company earned a total revenue of 669.2 million dollars, with a net income of 104.2 million dollars. Compared to the previous year, there was a 10.3% increase in total revenue and a 1.5% decrease in net income. MGE Energy’s total revenue has reached from 538.6 million dollars to 669.2 million dollars in the last 3 years.

However, this most recent quarter saw a slight decrease in net income compared to the previous year.

Stock Price

MGE Energy reported lower-than-expected earnings for the third quarter, sending shares lower on Thursday. Despite the miss, news sentiment around MGE Energy has been mostly positive. On Thursday, MGE ENERGY stock opened at $67.5 and closed at $67.2, down by 1.6% from its last closing price of $68.2.

VI Analysis

The company’s fundamentals reflect its long-term potential, with a strong focus on dividend payments and profitability.

However, its growth prospects are relatively weak, which may dissuade some investors. MGE Energy is classified as a “rhino” company, which means it has achieved moderate revenue or earnings growth. Rhino companies are typically valued more for their stability and dividend payments than for their growth potential. As such, MGE Energy may be of interest to income-focused investors who are willing to sacrifice some growth potential for the stability of a utility company. MGE Energy has an intermediate health score of 6/10, which suggests that it is in good financial health and should be able to pay off its debt and fund future operations.

VI Peers

The company has a long history dating back to 1855, when the city of Madison, Wisconsin, was founded. Today, MGE Energy Inc is a publicly traded company on the New York Stock Exchange and has a market capitalization of over $2 billion. The company’s main competitors are NorthWestern Corp, South Jersey Industries Inc, and ALLETE Inc.

– NorthWestern Corp ($NASDAQ:NWE)

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and industrial customers in Montana, South Dakota, and Nebraska, the United States. It generates, transmits, and distributes electricity from coal, hydro, solar, wind, and biomass resources. The company also generates, stores, transmits, and distributes natural gas. In addition, it engages in the energy marketing activities. As of December 31, 2020, the company owned or leased approximately 3,300 megawatts of generating capacity; and operated and maintained approximately 16,200 miles of transmission and distribution lines. NorthWestern Corporation was founded in 1923 and is headquartered in Sioux Falls, South Dakota.

– South Jersey Industries Inc ($NYSE:SJI)

South Jersey Industries Inc is a company that provides energy services to its customers. The company has a market cap of 4.21B as of 2022 and a return on equity of 9.62%. South Jersey Industries Inc is a provider of energy services to its customers and has a strong focus on customer satisfaction. The company has a long history of providing energy services to its customers and has a strong reputation in the industry.

– ALLETE Inc ($NYSE:ALE)

The company is a leading provider of advanced security, video surveillance and facility access control solutions. The company’s products are used in a variety of applications, including government, commercial, industrial, transportation and residential. The company’s products are designed to provide a high level of security and safety for people and property.

Summary

Investing in MGE Energy is a good way to gain exposure to the energy sector. The company is a leader in the industry and has a strong track record. The stock is trading at a reasonable price and offers a good dividend yield.