WEC Energy surges after crushing Q4 earnings with 75% EPS beat
Midwest utility raises dividend 6.7% and reaffirms 2026 growth targets amid robust operational performance
WEC Energy Group shares climbed on Wednesday after the Milwaukee-based utility delivered fourth-quarter results that handily exceeded analyst expectations, highlighted by a 75% earnings-per-share beat and a 23rd consecutive annual dividend increase.
The company reported adjusted earnings of $1.42 per share for the fourth quarter of 2025, dramatically surpassing the consensus estimate of 81 cents. Revenue reached $2.54 billion, 34% higher than Wall Street's projection of $1.90 billion. The performance marks one of the largest earnings beats in the utility sector this quarter.
WEC Energy, which serves approximately 4.4 million customers across Wisconsin, Illinois, Michigan, and Minnesota, also increased its quarterly dividend to 95.25 cents per share, a 6.7% increase from the previous payout. The move extends the company's streak of annual dividend increases to 23 years, placing it among the more reliable dividend growers in the utilities space.
"Our strong operational performance and disciplined capital investment strategy continue to deliver value for our customers and shareholders," the company stated in its earnings announcement. The dividend increase translates to an annualized payout of $3.81 per share, representing a yield of approximately 3.4% at current levels.
Perhaps most reassuring to investors, management reaffirmed its 2026 guidance for earnings per share in the range of $5.51 to $5.61, consistent with the company's long-term growth target of 7-8% compound annual growth rate. The guidance indicates confidence in the company's ability to maintain steady growth despite challenging economic conditions.
The stock's reaction reflects investor enthusiasm for the results, with shares gaining in Wednesday trading. WEC Energy now trades with a market capitalization of $35.7 billion and a forward price-to-earnings ratio of 19.8, a premium to the broader utilities sector but justified by its above-average growth profile.
Analysts covering WEC Energy maintain a largely positive outlook, with an average target price of $120.32, according to market data, representing roughly 6% upside from current levels. The stock has been rated as a buy or strong buy by 8 analysts, while 10 recommend hold and 1 suggests sell.
The utility sector has faced headwinds in recent months from rising interest rates, which typically pressure high-dividend stocks. However, WEC's earnings-driven dividend increases and consistent operational execution have helped it outperform many peers. The company's low beta of 0.58 indicates it remains a defensive play, while still offering growth characteristics uncommon for traditional utilities.
WEC Energy's strong quarter reflects broader strength in the Midwest utility market, where demand remains stable and regulatory environments have been relatively constructive. The company has been investing strategically in renewable energy infrastructure and grid modernization, positioning itself for the energy transition while maintaining reliable service for its customer base.
Looking ahead, investors will focus on whether WEC can maintain its 7-8% long-term growth trajectory and continue delivering dividend increases at or above the current 6.7% pace. The 2026 guidance suggests confidence in that outlook, though utility companies typically face pressure from regulatory reviews and capital expenditure cycles that can impact earnings variability.
With 84.7% of shares held by institutional investors, WEC Energy remains a favorite among large-cap utility funds and dividend-focused strategies. The combination of above-sector growth, a growing dividend stream, and defensive characteristics positions the company as a relative winner in the utilities space as investors navigate a complex macroeconomic environment.