Financial Contrast: Ameresco (AMRC) & WEC Energy Group (WEC)

Ameresco (NYSE: AMRC) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

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This table compares Ameresco and WEC Energy Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ameresco 5.23% 11.18% 3.90%
WEC Energy Group 15.75% 10.81% 3.24%

Valuation and Earnings

This table compares Ameresco and WEC Energy Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ameresco $717.15 million 0.76 $37.49 million $0.83 14.40
WEC Energy Group $7.65 billion 2.50 $1.20 billion $3.79 15.96

WEC Energy Group has higher revenue and earnings than Ameresco. Ameresco is trading at a lower price-to-earnings ratio than WEC Energy Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Ameresco has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500.

Dividends

WEC Energy Group pays an annual dividend of $2.21 per share and has a dividend yield of 3.7%. Ameresco does not pay a dividend. WEC Energy Group pays out 58.3% of its earnings in the form of a dividend. Ameresco has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ameresco and WEC Energy Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameresco 0 0 3 0 3.00
WEC Energy Group 1 7 1 0 2.00

Ameresco currently has a consensus target price of $11.50, indicating a potential downside of 3.77%. WEC Energy Group has a consensus target price of $65.50, indicating a potential upside of 8.26%. Given WEC Energy Group’s higher probable upside, analysts clearly believe WEC Energy Group is more favorable than Ameresco.

Institutional & Insider Ownership

25.8% of Ameresco shares are held by institutional investors. Comparatively, 72.8% of WEC Energy Group shares are held by institutional investors. 58.4% of Ameresco shares are held by company insiders. Comparatively, 1.0% of WEC Energy Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

WEC Energy Group beats Ameresco on 9 of the 17 factors compared between the two stocks.

Ameresco Company Profile

Ameresco, Inc. (Ameresco) is a provider of a range of energy services, including energy efficiency, infrastructure upgrades, energy security and resilience, asset sustainability and renewable energy solutions for businesses and organizations throughout North America and Europe. Ameresco’s sustainability services include capital and operational upgrades to a facility’s energy infrastructure and the development, construction, ownership and operation of renewable energy plants. Its segments include U.S. Regions, U.S. Federal, Canada, Small-Scale Infrastructure and All Other. Its U.S. Regions, U.S. Federal and Canada segments offer energy efficiency products and services. Its Small-Scale Infrastructure segment sells electricity, processed renewable gas fuel, heat or cooling, produced from renewable sources of energy and generated by small-scale plants that it owns. The All Other segment offers enterprise energy management services, consulting services and integrated-photovoltaic (PV).

WEC Energy Group Company Profile

WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.

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