Wisconsin Energy Corporation (WEC) unveiled its upcoming capital expenditure and share repurchase plan. The company also reaffirmed its earnings guidance for 2013.
The board of directors of Wisconsin Energy has approved approximately $0.71 billion of capital expenditure for 2014. The company intends to allocate a major portion of the fund to improve and modernize its utility infrastructure.
Wisconsin Energy also projected capital expenditure in the range of $3.2 – $3.5 billion for the period 2014 to 2018. The company’s capital investment plans are comparable with its earlier spending guidance for 2013 to 2017. We believe that the completion of a biomass fuel generating plant in Rothschild and shifting of focus to smaller projects from large renewable generation and air quality control projects may help Wisconsin Energy to keep its capital expenditure level constant.
The company also reiterated its earnings guidance for 2013 in the range of $2.43 – $2.48 per share, up from the year-ago figure of $2.35 per share. A steady increase in customer count, scheduled completion of projects and systematic investment strategy are expected to contribute significantly to future results.
Wisconsin Energy continues to take shareholder friendly moves like share buybacks and incremental dividends to improve shareholder wealth. The board of directors recently authorized a purchase of up to $0.3 billion of common stock between 2014 and 2017 via open market purchases or privately negotiated transactions. To date, the company has repurchased approximately 7.12 million shares at a cost of above $0.25 billion under its existing $0.3 billion share buyback program.
In addition, we appreciate Wisconsin Energy’s steady effort towards minimization of long-term debt. As of Sep 30 2013, the company’s long-term debt was reduced to $4.4 billion from $4.5 billion as of Dec 30 2012. The company intends to pay off approximately $0.5 million in debts by 2017. This initiative will subsequently enable the company to improve its future margins.
Wisconsin Energy currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing well include Brookfield Infrastructure Partners L.P. (BIP), Alliant Energy Corporation (LNT) and NiSource Inc. (NI). All the three stocks carry a Zacks Rank #2 (Buy).
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