NorthWestern (NYSE:NWE – Get Free Report) and WEC Energy Group (NYSE:WEC – Get Free Report) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.
Institutional and Insider Ownership
96.1% of NorthWestern shares are owned by institutional investors. Comparatively, 75.8% of WEC Energy Group shares are owned by institutional investors. 0.9% of NorthWestern shares are owned by insiders. Comparatively, 0.3% of WEC Energy Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for NorthWestern and WEC Energy Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NorthWestern | 2 | 3 | 3 | 0 | 2.13 |
| WEC Energy Group | 2 | 3 | 3 | 0 | 2.13 |
Profitability
This table compares NorthWestern and WEC Energy Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NorthWestern | 11.67% | 6.53% | 2.38% |
| WEC Energy Group | 14.57% | 11.48% | 3.21% |
Risk and Volatility
NorthWestern has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.
Dividends
NorthWestern pays an annual dividend of $2.56 per share and has a dividend yield of 5.1%. WEC Energy Group pays an annual dividend of $3.12 per share and has a dividend yield of 3.7%. NorthWestern pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WEC Energy Group pays out 72.7% of its earnings in the form of a dividend. NorthWestern has increased its dividend for 19 consecutive years and WEC Energy Group has increased its dividend for 19 consecutive years.
Valuation and Earnings
This table compares NorthWestern and WEC Energy Group’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NorthWestern | $1.48 billion | 2.05 | $183.01 million | $3.00 | 16.79 |
| WEC Energy Group | $9.60 billion | 2.78 | $1.41 billion | $4.29 | 19.75 |
WEC Energy Group has higher revenue and earnings than NorthWestern. NorthWestern 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.
Summary
WEC Energy Group beats NorthWestern on 10 of the 14 factors compared between the two stocks.
About NorthWestern
NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers. The company operates through three segments: Electric Utility Operations; Natural Gas Utility Operations; and Other. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,597 miles of electric transmission and 18,534 miles of electric distribution lines with approximately 121 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,099 miles of natural gas distribution lines with approximately 135 city gate stations in Montana. It also operates 1,308 miles of electric transmission and 2,342 miles of electric distribution lines in South Dakota with approximately 121 transmission and distribution substations; and 55 miles of natural gas transmission and 2,545 miles of natural gas distribution lines in South Dakota and Nebraska. The company serves approximately 764,200 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.
About WEC Energy Group
WEC Energy Group, Inc., through its subsidiaries, provides regulated natural gas and electricity, and renewable and nonregulated renewable energy services in the United States. The company operates through six segments: Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure, and Corporate and Other. It generates and distributes electricity from coal, natural gas, and oil, as well as hydroelectric, wind, solar, and biomass sources; provides electric transmission services; offers retail natural gas distribution services; transports natural gas; and generates, distributes, and sells steam. As of December 31, 2022, it operated approximately 35,600 miles of overhead distribution lines and 36,100 miles of underground distribution cables, as well as 430 electric distribution substations and 514,800 line transformers; 52,000 miles of natural gas distribution mains; 1,100 miles of natural gas transmission mains; 2.4 million natural gas lateral services; 500 natural gas distribution and transmission gate stations; and 68.2 billion cubic feet of working gas capacities in underground natural gas storage fields. The company was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in June 2015. WEC Energy Group, Inc. was founded in 1896 and is headquartered in Milwaukee, Wisconsin.
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