Equity Research Analysis: MGE ENERGY INC (MGEE)
|Blank Capital Research Unit|Spot: $82.59
Price$82.59
Composite Score41.0/100
RatingREDUCE (2★)
Rank#3422 OF 7,333
Market Cap$4.5B
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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3422
Positioning
Market Dominance
Transportation, Communications, Electric, Gas, And Sanitary Services
Utilities
$4.5B
Jeffrey M. Keebler
MGE Energy, Inc. generates, purchases, and distributes electricity; owns or leases electric generation facilities located in Wisconsin and Iowa. As of December 31, 2021, the company generated and distributed electricity to 159,000 customers in Dane County, Wisconsin; and purchased and distributed natural gas to 169,000 people in seven Wisconsin counties.
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Dates updated upon official exchange announcement.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UGP ULTRAPAR HOLDINGS INC | 79 | 90 | 95 | 87 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$TNK TEEKAY TANKERS LTD. | 78 | 94 | 97 | 82 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$DHT DHT Holdings, Inc. | 75 | 84 | 88 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$STNG Scorpio Tankers Inc. | 75 | 86 | 95 | 74 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NAT NORDIC AMERICAN TANKERS Ltd | 75 | 82 | 88 | 87 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AMX AMERICA MOVIL SAB DE CV/ | 74 | 86 | 81 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$PAC Pacific Airport Group | 73 | 94 | 80 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GSL Global Ship Lease, Inc. | 73 | 82 | 94 | 81 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$TRMD TORM plc | 73 | 86 | 94 | 65 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$VIV TELEFONICA BRASIL S.A. | 73 | 82 | 90 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$MGEE MGE ENERGY INC | 41 | 37 | 32 | 21 | 19.3x | 15.9x | 11.8% | 5.1% | 45.0% | 25.8% | 21.3% | 20.6% | 2.2% | 130.0x | $4.5B | ||
| SECTOR BENCH | - | - | - | - | - | 16.9x | 6.1x | 11.9% | 3.2% | 52.6% | 14.8% | 7.7% | 4.2% | 1.4% | 1.3x | - | REF |
MGE ENERGY INC (MGEE) receives a "Reduce" rating with a composite score of 41.0/100. It ranks #3422 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Lagging peers — losers tend to keep underperforming
Expensive relative to fundamentals — limited margin of safety
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Transportation, Communications, Electric, Gas, And Sanitary Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for MGEE.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 37 | 31 | +6ALPHA |
| MOMENTUM | 21 | 14 | +7ALPHA |
| VALUATION | 32 | 27 | +5NEUTRAL |
| INVESTMENT | 34 | 41 | -7DRAG |
| STABILITY | 85 | 87 | -2NEUTRAL |
| SHORT INT | 50 | 49 | +1NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 5.0% vs WACC 7.8% (spread -2.8%)
GM 45% vs sector 53%, OM 26% vs sector 15%
Capital turnover 0.21x
Rev growth 21%, 10yr history
Interest coverage 5.9x, Net debt/EBITDA 16.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate MGE ENERGY INC (MGEE) as a Reduce with a composite score of 41.0/100 at a current price of $82.59. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
MGE ENERGY INC holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 41.0/100 places it at rank #3422 in our full universe.
No Moat
Medium
Standard
Fair Value
Gross margins of 45% signal strong pricing power.
Stable competitive position in a defensive sector.
Leverage of 130% D/E amplifies downside risk.
Weak momentum suggests persistent institutional selling pressure.
Vulnerability to macroeconomic shocks and interest rate volatility.
MGE ENERGY INC represents a reduce based on multi-factor quantitative performance.
MGE ENERGY INC receives a Reduce rating from our analysis, with a composite score of 41.0/100 and 2 out of 5 stars, ranking #3422 out of 7,333 stocks. MGEE's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
MGEE's quality score of 37/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 11.8% (sector avg: 11.9%), gross margins of 45.0% (sector avg: 52.6%), net margins of 21.3% (sector avg: 7.7%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 32/100, MGEE appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/E ratio of 19.26x, an EV/EBITDA of 15.87x, a P/B ratio of 2.28x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
MGE ENERGY INC's investment score of 34/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 20.6% vs. a sector average of 4.2% and a return on assets of 5.1% (sector: 3.2%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
MGE ENERGY INC is experiencing notably weak momentum with a score of just 21/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 20.6% year-over-year, while a beta of 0.24 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
MGE ENERGY INC earns an excellent stability score of 85/100, reflecting low price volatility and a conservatively managed balance sheet. Key stability metrics include a beta of 0.24 and a debt-to-equity ratio of 130.00x (sector avg: 1.3x). Stocks with this level of stability tend to act as portfolio anchors, providing downside protection during market corrections while still participating in broad market advances.
The short interest score of 50/100 for MGEE suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 130.00x). With a $4.5B market cap (mid-cap), MGE ENERGY INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
MGEE pays a solid dividend yield of 2.2%, contributing an income component to total returns. This compares to a sector average dividend yield of 1.4%. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
MGE ENERGY INC is a mid-cap company in the Transportation, Communications, Electric, Gas, And Sanitary Services sector, ranked #0 of 50 in its sector (100th percentile) and #3422 of 7,333 overall (53rd percentile). Key comparisons include ROE of 11.8% trailing the 11.9% sector median and operating margins of 25.8% above the 14.8% sector average. This top-quartile standing reflects exceptional competitive strength relative to Transportation, Communications, Electric, Gas, And Sanitary Services peers.
While MGEE currently exhibits a REDUCE profile, superior opportunities exist within the TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS, AND SANITARY SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Transportation, Communications, Electric, Gas, And Sanitary Services Alpha →Quant Factor Profile
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Improvement in Momentum (21) would have the largest impact on the composite score.
EV/EBITDA 160% ABOVE SECTOR MEDIAN
ROE IN LINE WITH SECTOR BENCHMARKS
Gross Margin 14% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
MGE (MGEE) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
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