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1. Company Snapshot

1.a. Company Description

MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company primarily in Wisconsin.It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other.The company generates, purchases, and distributes electricity; owns or leases electric generation facilities located in Wisconsin and Iowa; and plans, constructs, operates, maintains, and expands transmission facilities to provide transmission services.


It also generates electricity from coal-fired, gas-fired, and renewable energy sources, as well as purchases power under short and long-term commitments.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 customers in seven Wisconsin counties.MGE Energy, Inc.is headquartered in Madison, Wisconsin.

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1.b. Last Insights on MGEE

MGE Energy's recent performance was negatively impacted by its Q2 earnings miss, with quarterly earnings of $0.72 per share, falling short of the Zacks Consensus Estimate of $0.73 per share. Despite a 10.6% rise in Q2 EPS, the company's valuation has become a dissuading factor. Additionally, while MGE Energy's demographic trends remain promising, with an impressive AA- S&P credit rating, its dividend growth, although reliable, may not be sufficient to drive short-term gains. The company's recent dividend increase, marking its 50th consecutive year, may not be enough to offset earnings concerns.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Creative Planning Increases Stock Position in MGE Energy Inc. $MGEE

Dec -02

Source: defenseworld.net

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Advisors Asset Management Inc. Has $1.12 Million Stake in MGE Energy Inc. $MGEE

Dec -01

Source: defenseworld.net

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MGE to Add More Solar, Battery Storage and Wind

Nov -25

Source: businesswire.com

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Analyzing Companhia Paranaense de Energia – Copel (NYSE:ELPC) and MGE Energy (NASDAQ:MGEE)

Nov -17

Source: defenseworld.net

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MGE Looks to Add More Solar and Battery Storage to Serve Customers

Nov -05

Source: businesswire.com

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MGE (MGEE) Q3 Earnings Surpass Estimates

Nov -05

Source: zacks.com

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MGE Energy Reports Third-Quarter 2025 Earnings

Nov -05

Source: businesswire.com

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Yousif Capital Management LLC Has $1.20 Million Stake in MGE Energy Inc. $MGEE

Oct -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.59%)

6. Segments

Electric

Expected Growth: 4.5%

MGE Energy, Inc.'s 4.5% growth in Electric segment is driven by increasing demand for renewable energy, grid modernization initiatives, and strategic investments in infrastructure. Additionally, favorable weather patterns, customer growth, and rate base expansion contribute to the segment's growth.

Gas

Expected Growth: 4.8%

MGE Energy's 4.8% gas segment growth is driven by increasing demand from commercial and industrial customers, favorable weather conditions, and strategic infrastructure investments. Additionally, the company's focus on energy efficiency programs and rate base growth contribute to the segment's expansion.

Non-regulated Energy

Expected Growth: 5.2%

MGE Energy's non-regulated energy segment growth of 5.2% is driven by increasing demand for renewable energy, expansion of Badger Hollow Solar Farm, and strategic investments in energy efficiency projects. Additionally, growing commercial and industrial customer base, and favorable market conditions contribute to the segment's growth.

7. Detailed Products

Electricity

MGE Energy, Inc. generates and distributes electricity to residential, commercial, and industrial customers in Wisconsin.

Natural Gas

MGE Energy, Inc. provides natural gas services to customers in Wisconsin, offering a safe and reliable supply of natural gas for heating, cooking, and other uses.

Renewable Energy

MGE Energy, Inc. invests in renewable energy sources, such as wind and solar power, to reduce carbon emissions and promote sustainability.

Energy Efficiency

MGE Energy, Inc. offers energy efficiency programs and services to help customers reduce energy consumption and lower their energy bills.

Energy Storage

MGE Energy, Inc. provides energy storage solutions to customers, enabling them to store excess energy generated from renewable sources.

8. MGE Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MGE Energy, Inc. operates in a regulated industry, which limits the threat of substitutes. However, the increasing adoption of renewable energy sources and energy storage technologies could pose a moderate threat to the company's traditional business model.

Bargaining Power Of Customers

MGE Energy, Inc. serves a diverse customer base, including residential, commercial, and industrial customers. While large industrial customers may have some bargaining power, the company's diversified customer base limits the overall bargaining power of customers.

Bargaining Power Of Suppliers

MGE Energy, Inc. relies on a few large suppliers for fuel and other essential inputs. While the company has some bargaining power due to its size, suppliers may still exert some pressure on prices and terms.

Threat Of New Entrants

The utility industry is heavily regulated, and new entrants would face significant barriers to entry, including high capital costs and regulatory hurdles. This limits the threat of new entrants to MGE Energy, Inc.'s business.

Intensity Of Rivalry

MGE Energy, Inc. operates in a competitive industry, with several other utilities operating in the region. While the company has a strong market position, it still faces competition from other utilities and alternative energy providers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.62%
Debt Cost 4.82%
Equity Weight 59.38%
Equity Cost 7.51%
WACC 6.42%
Leverage 68.42%

11. Quality Control: MGE Energy, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Otter Tail

A-Score: 6.6/10

Value: 5.3

Growth: 7.0

Quality: 6.5

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
NorthWestern

A-Score: 6.5/10

Value: 6.1

Growth: 3.4

Quality: 5.1

Yield: 8.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Avista

A-Score: 6.3/10

Value: 6.5

Growth: 4.2

Quality: 4.3

Yield: 8.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Black Hills

A-Score: 6.2/10

Value: 5.2

Growth: 4.4

Quality: 4.4

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
MGE Energy

A-Score: 5.1/10

Value: 2.5

Growth: 5.2

Quality: 5.8

Yield: 4.0

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
AES

A-Score: 5.1/10

Value: 6.6

Growth: 5.4

Quality: 3.5

Yield: 8.0

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

78.92$

Current Price

78.92$

Potential

-0.00%

Expected Cash-Flows