Dividend Power Play: 3%+ Yield With Positive Returns – Part III

WEC Energy Group (WEC)

Similar to Philip Morris International, WEC Energy Group emerges as a compelling defensive investment option with stable fundamentals and characteristics that provide insulation from various market headwinds. Check out – Dividend Power Play: These 3 Stocks Have 3%+ Yield With Positive Returns This Year

But if you want to reduce volatility, while leaving ample room for upside, consider the Trefis High Quality portfolio strategy (HQ). This strategy has outperformed the market with over 75% returns since its inception, as demonstrated by its HQ performance metrics.

Protection From Trade Tensions

• As a domestically-focused regulated utility provider, WEC Energy enjoys significant protection from global trade disruptions.
• While the company may face some minor impacts from tariffs on infrastructure maintenance and expansion components, its regulated status allows it to pass these increased costs on to customers, effectively neutralizing potential margin pressure.

Attractive and Growing Dividend

• Income-focused investors will appreciate WEC Energy’s solid 3.1% dividend yield, but what makes the company particularly attractive is its impressive dividend growth rate exceeding 7.3% annually.
• This combination of current yield and consistent growth provides both immediate income and potential for meaningful dividend appreciation over time.

Financial Stability Despite Revenue Challenges

• Though WEC Energy’s top-line growth has remained relatively slow (1.6% in the last three years), the company compensates with exceptional financial efficiency. With cash flow margins above 35% and operating margins of 25%, the utility demonstrates superior operational execution and cost management.
• The company maintains a disciplined approach to leverage, with debt levels still under control. This prudent financial management gives WEC Energy the flexibility to navigate changing interest rate environments while continuing to invest in infrastructure improvements.

Investment Thesis

• WEC Energy’s stock price has shown positive momentum with over 10% gains this year, reflecting investor confidence in its business model and recognition of its defensive characteristics.
• For investors concerned about economic unpredictability, trade tensions, or market volatility, WEC Energy represents a compelling option that combines defensive positioning with respectable returns. The company’s regulated status, strong margins, growing dividend, and domestic focus create a buffer against many of the factors currently creating uncertainty in global markets.
• While utilities may not offer explosive growth potential, WEC Energy’s financial discipline and steady dividend growth make it worth consideration for investors looking to add stability to their portfolios during uncertain times.

In today’s uncertain market environment characterized by trade tensions and volatility, WEC stock offers a compelling combination of current income, growth potential, and defensive characteristics. WEC Energy Group offer the stability of regulated utilities with impressive dividend growth rates.

For investors seeking to balance defensive positioning with attractive returns, WEC represents a strategic option that has demonstrated resilience during market turbulence. Its combination of sustainable dividends, operational efficiency, and relative insulation from trade conflicts makes them worthy of consideration for portfolios focused on stability without sacrificing income or growth potential.

Similarly, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

[1] Returns as of 4/8/2025
[2] Cumulative total returns since the end of 2016

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