MGE Energy (MGEE) AI Stock Analysis

• Market Cap: $3.05B
• Dividend Yield: 2.19%
• Average Volume (3M): 133.12K
• Price to Earnings (P/E): 23.2
• Beta (1Y): 0.37
• Revenue Growth: 8.47%
• EPS Growth: 12.76%
• Country: US
• Employees: 717
• Sector: Utilities
• Sector Strength: 57
• Industry: Diversified Utilities
• EPS (TTM): 0.72
• Shares Outstanding: 36,541,847
• 10 Day Avg. Volume: 119,947
• 30 Day Avg. Volume: 133,118
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 5.56
• Enterprise Value/Gross Profit: 13.41
• Enterprise Value/Ebitda: 13.76
• 1Y Price Target: $85.00
• Price Target Upside: 1.82% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 74 Outperform
• Price Target: $96.00 ▲(15.00% Upside)

MGE Energy's strong financial performance and positive corporate events, including a significant dividend increase and robust earnings growth, are key strengths. However, technical indicators suggest a neutral outlook, and the valuation appears high, which tempers the overall score.

Positive Factors

Dividend Growth

The consistent increase in dividends for 50 consecutive years highlights MGE Energy's commitment to returning value to shareholders, demonstrating financial stability and a strong long-term business strategy.

Profitability

The improvement in gross profit margin indicates enhanced operational efficiency and effective cost management, contributing to sustained profitability and competitive advantage in the utility sector.

Earnings Growth

The earnings growth driven by rate base investment and favorable conditions reflects MGE Energy's ability to capitalize on strategic projects, supporting long-term revenue and profit expansion.

Negative Factors

Free Cash Flow Challenges

Negative free cash flow growth suggests potential liquidity challenges, which could impact MGE Energy's ability to invest in future projects and maintain financial flexibility over the long term.

Cash Flow to Net Income Ratio

A low free cash flow to net income ratio indicates that MGE Energy may face difficulties in converting earnings into cash, potentially affecting its capacity to fund operations and growth initiatives.

Free Cash Flow Management

Ongoing issues with free cash flow management could hinder MGE Energy's ability to sustain operational and capital expenditures, posing risks to its long-term financial health and strategic objectives.

MGE Energy Business Overview & Revenue Model

Company Description

MGE Energy, Inc. (MGEE) is a publicly traded holding company based in Madison, Wisconsin, primarily engaged in the utility sector. The company operates through its principal subsidiary, Madison Gas and Electric Company (MGE), which provides electric and natural gas services to residential, commercial, and industrial customers in south-central Wisconsin. MGE Energy focuses on delivering reliable energy services while promoting sustainability through renewable energy initiatives, energy efficiency programs, and environmentally responsible practices.

How the Company Makes Money

MGE Energy generates revenue primarily through the sale of electricity and natural gas to its customers. The company’s revenue model is driven by regulated utility services, where rates are set by the Wisconsin Public Service Commission (PSC) based on the company's cost of service and allowed return on investment. Key revenue streams include residential, commercial, and industrial electricity sales, along with natural gas sales. Additionally, MGE earns revenue from various energy efficiency programs and renewable energy initiatives, often supported by state and federal incentives. The company may also benefit from partnerships with local governments and businesses to promote sustainability, which can lead to additional funding and revenue opportunities.

MGE Energy Financial Statement Overview

Summary

MGE Energy demonstrates robust financial health with strong profitability and stable leverage. Revenue and profit margins are improving, but attention is needed on free cash flow management. Overall, the company is well-positioned in the diversified utilities sector.

Income Statement

MGE Energy shows strong profitability with a consistent increase in gross profit margin from 34.1% in 2022 to 56.5% TTM. The net profit margin has also improved to 18.2% TTM. Revenue growth is positive at 1.95% TTM, indicating a recovery from previous declines. EBIT and EBITDA margins are stable, reflecting efficient operations.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.61 TTM, showing prudent leverage management. Return on equity is solid at 10.8% TTM, indicating effective use of equity capital. The equity ratio remains stable, suggesting a balanced capital structure.

Cash Flow

Operating cash flow is strong, with a coverage ratio of 2.70 TTM, indicating good cash generation relative to net income. However, free cash flow growth is negative at -11.5% TTM, which could signal potential cash flow challenges. The free cash flow to net income ratio is modest at 0.17 TTM.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	718.32M	676.94M	690.43M	714.52M	606.58M	538.63M
Gross Profit	297.89M	278.83M	269.04M	243.92M	213.55M	203.94M
EBITDA	290.36M	272.68M	276.28M	249.37M	210.97M	209.55M
Net Income	131.05M	120.57M	117.70M	110.95M	105.76M	92.42M
Balance Sheet
Total Assets	2.86B	2.83B	2.68B	2.52B	2.37B	2.25B
Cash, Cash Equivalents and Short-Term Investments	10.57M	21.30M	11.14M	11.60M	17.44M	44.74M
Total Debt	772.13M	787.45M	780.01M	727.17M	641.92M	594.11M
Total Liabilities	1.59B	1.60B	1.54B	1.44B	1.34B	1.28B
Stockholders Equity	1.27B	1.23B	1.14B	1.08B	1.03B	976.00M
Cash Flow
Free Cash Flow	44.25M	40.86M	15.49M	-21.30M	-15.64M	-30.70M
Operating Cash Flow	281.30M	277.78M	237.56M	153.74M	137.53M	172.44M
Investing Cash Flow	-246.23M	-241.49M	-230.02M	-180.15M	-156.97M	-210.41M
Financing Cash Flow	-41.47M	-26.83M	-10.48M	25.54M	-8.76M	59.19M

MGE Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 83.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGEE, the sentiment is Negative. The current price of 83.48 is below the 20-day moving average (MA) of 84.83, below the 50-day MA of 85.31, and below the 200-day MA of 89.59, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 43.25 is Neutral, neither overbought nor oversold. The STOCH value of 9.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGEE.

MGE Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTTR	79 Outperform	$3.47B	12.19	17.13%	2.46%	-3.69%	-8.25%
BKH	77 Outperform	$4.28B	14.81	8.13%	4.56%	5.41%	-1.89%
NWE	77 Outperform	$3.47B	15.37	7.93%	4.63%	3.78%	7.48%
MGEE	74 Outperform	$3.05B	23.19	10.75%	2.19%	8.47%	12.76%
AVA	72 Outperform	$2.93B	16.19	6.91%	5.37%	2.41%	-9.85%
Sector *	66 Neutral	$17.40B	17.96	5.60%	3.67%	6.62%	11.55%
ALE	62 Neutral	$3.68B	20.02	6.46%	4.54%	-0.44%	-17.46%

MGE Energy Corporate Events

MGE Energy Increases Quarterly Dividend by 5.6%

On August 15, 2025, MGE Energy announced a 5.6% increase in its regular quarterly dividend to $0.475 per share, payable on September 15, 2025, marking the 50th consecutive year of dividend increases. This milestone underscores the company’s commitment to sustainable growth and reflects the strength of its long-term business strategy, which focuses on providing reliable and affordable energy while delivering value to customers and shareholders.

MGE Energy Reports Strong Q2 2025 Earnings Growth

On August 6, 2025, MGE Energy reported its second-quarter earnings for 2025, showing an increase in GAAP earnings to $26.5 million, or $0.73 per share, up from $23.8 million, or $0.66 per share, in the same period of 2024. The growth was driven by rate base investment and favorable weather conditions, with notable contributions from the operational Darien Solar Project and Paris Battery Energy Storage System. Electric residential sales rose by approximately 5% due to warmer weather, while gas net income remained steady compared to the previous year.