- Price
- $72.27
- Fair value
- $77.00
- Discount
- 6.1%
- Uncertainty
- Low
- LSEG rating
- 2.80
- Moat
- Narrow
- Next earnings
- 2026-11-05
- Next earnings is estimate
- Yes
- Company name
- MGE Energy
- Sector
- Electric & gas utility
- About
- MGE Energy is a public utility holding company based in Madison, Wisconsin. Its main subsidiary, Madison Gas and Electric, generates and distributes electricity to 170,000 customers in Dane County, Wisconsin, and buys and distributes natural gas to 180,000 customers in seven counties in south-central and western Wisconsin. It owns shares in coal, natural gas, wind and solar plants, and it invests in more solar, wind and battery storage. The Public Service Commission of Wisconsin sets its rates, so earnings grow mostly with the rate base. MGE Energy has increased its dividend for 51 years in a row.
- Thesis
- The market prices MGE Energy as a small, slow-growing utility that must issue new shares and debt to pay for its investments. Its electric rates rose only 0.15% in 2026 under the rate settlement, and it sold new shares in May 2026. The value depends much on interest rates, because investors buy the stock mainly for its dividend. For the gap to close, three things must be true. The approved increase of 3.63% in electric rates and 2.04% in gas rates for 2027 must take effect, as the settlement says. The Public Service Commission of Wisconsin must approve the 2027 Fuel Cost Plan by the end of 2026. MGE must complete its solar, wind and battery projects near their approved costs, so that rate base and earnings grow. The Q3 2026 report, expected in early November 2026, and the full-year report in early 2027 give the next evidence. If these checks pass, the gap can close over the next two to four quarters. The main reason it may not close is higher interest rates, which lower the value of utility shares and raise the cost of new debt.
- Risks
- Higher interest rates raise the cost of new debt and make the dividend less attractive compared with bonds. This can lower the share price even if earnings grow.
The investment plan needs new shares and new debt. In May 2026, MGE Energy sold 3.3 million shares, partly under forward agreements. More shares lower the growth in EPS.
Some projects cost more than the Public Service Commission of Wisconsin first approved. MGE asks for recovery of the higher costs, but regulators may not allow all of them.
MGE plans to stop the use of coal as a primary fuel at the Elm Road Units by the end of 2030. The change needs approval and investment, and costs can increase.
- Balance sheet
- Cash: $17M
Debt: $934M
Net debt: $917M
Interest cover: 4.5×
Debt due within 12 months: $55M
At June 30, 2026, debt was $934 million: long-term debt of $879 million, long-term debt due within one year of $21 million and short-term debt of $35 million. Cash was $17 million. Interest cover is operating income divided by net interest expense for the first half of 2026. On October 1, 2026, MGE Energy and Madison Gas and Electric extended their credit agreements to October 1, 2031. At June 30, 2026, Madison Gas and Electric had $140 million of remaining regulatory authority to issue long-term debt.
As of 2026-06-30.
- Checkpoints
- Nov 5, 2026 (estimate): Q3 2026 earnings. Pending. Watch: Higher year-to-date earnings from the growing rate base pass; lower earnings without a weather or one-time cause fail.
Dec 2026 (estimate): 2027 Fuel Cost Plan decision. Pending. Watch: Approval of the 2027 Fuel Cost Plan by the end of 2026 passes; a delay or a large disallowance fails.
- Recent events
- 2026-10-01: MGE Energy and Madison Gas and Electric amended their credit agreements and extended them to October 1, 2031. One of the Madison Gas and Electric agreements with JPMorgan Chase increased from $90 million to $210 million.
2026-08-21: MGE Energy increased its quarterly dividend by 7.0% to $0.5083 per share. This was its 51st year in a row of dividend increases.
2026-08-05: MGE Energy reported Q2 2026 results. Net income was $33.4 million, or $0.89 per share, compared with $0.72 a year earlier. Electric earnings rose $3.0 million because of a higher rate base from new renewable projects, and investment gains of about $3.9 million also helped.
2026-05-06: MGE Energy agreed to sell 3,300,331 shares in a public offering. It sold 990,099 shares directly, for net proceeds of about $72.2 million, and the other 2,310,232 shares were sold under forward sale agreements, which it settles later.