Owner Scorecard
An independent research publication · data as of July 9, 2026

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MGEE, MGE Energy

Multi-Utilities capital-intensive Capital build-out

A capital-intensive business, run on heavy physical assets that must be kept working and earn a return above what they cost to maintain.

Latest annual: FY2025 10-K
MGEE · MGE Energy
I

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025
$744M
+9.9% YoY · 7% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $767M 5-yr avg $686M
Operating margin 22.3% 5-yr avg 20.9%
ROIC 7% 5-yr avg 7%
Owner-earnings margin −17% 5-yr avg −2%
Free cash flow margin −17% 5-yr avg −2%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation
Capital build-out. Capital spending has surged to 46% of sales, today's earnings are charged less depreciation than tomorrow's will be.
What moves the needle
Operating margin has run about 20% through the cycle, a solid margin the cost base and competition set as much as the price does. That margin has held in a narrow 19%–23% band over the years, so steadiness itself is the evidence — the lever is unit growth and cost discipline, not a moving line. Capital spending runs about 29% of sales, so the return earned on what it sinks into that plant weighs as much as the margin.
Is it a good business?
Return on capital has rarely cleared the cost of capital (median 7%, above 15% in 0 of 10 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

II

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left
2016’162017’172018’182019’192020’202021’212022’222023’232024’242025’25TTMTTMMar 2026
Income statement
$545M$563M$560M$569M$539M$607M$715M$690M$677M$744M$767MRevenueRevenue
$124M$125M$114M$111M$110M$117M$138M$146M$146M$171M$171MOperating incomeOp. inc.
22.7%22.1%20.4%19.5%20.4%19.3%19.3%21.2%21.6%22.9%22.3%Operating marginOp. mgn
$76M$98M$84M$87M$92M$106M$111M$118M$121M$136M$143MNet incomeNet inc.
36%18%25%19%17%4%19%19%8%13%12%Effective tax rateTax rate
Cash flow & returns
$148M$131M$153M$130M$172M$138M$154M$238M$278M$263M$266MOperating cash flowOp. cash
$72M$34M$69M$44M$80M$32M$43M$120M$157M$127M$123MWorking capital & otherWC & other
$84M$108M$212M$164M$203M$153M$175M$222M$237M$343M$397MCapexCapex
15.4%19.2%37.9%28.8%37.7%25.3%24.5%32.2%35.0%46.2%51.7%Capex / revenueCapex/rev
$64M$23M($59M)($34M)($31M)($16M)($21M)$15M$41M($80M)($131M)Owner earningsOwner earn.
11.8%4.1%−10.6%−5.9%−5.7%−2.6%−3.0%2.2%6.0%−10.8%−17.0%Owner earnings marginOE mgn
$64M$23M($59M)($34M)($31M)($16M)($21M)$15M$41M($80M)($131M)Free cash flowFCF
11.8%4.1%−10.6%−5.9%−5.7%−2.6%−3.0%2.2%6.0%−10.8%−17.0%Free cash flow marginFCF mgn
$42M$44M$46M$48M$52M$55M$58M$60M$64M$68M$69MDividends paidDiv. paid
8%9%7%7%6%7%7%6%7%7%7%ROICROIC
10%13%10%10%9%10%10%10%10%10%11%Return on equityROE
5%7%5%5%4%5%5%5%5%5%6%Retained to equityRetained/eq
Balance sheet
$96M$108M$83M$23M$45M$17M$12M$11M$21M$6M$9MCash & investmentsCash+inv
$40M$42M$44M$40M$41M$46M$55M$47M$51M$58M$59MReceivablesReceiv.
$48M$48M$46M$55M$55M$64M$59M$65M$77M$118M$57MAccounts payablePayables
($8M)($5M)($3M)($15M)($13M)($18M)($4M)($19M)($26M)($60M)$2MOperating working capitalOper. WC
$276M$291M$241M$182M$210M$199M$243M$238M$227M$229M$211MCurrent assetsCur. assets
$104M$127M$121M$129M$191M$118M$225M$157M$126M$297M$183MCurrent liabilitiesCur. liab.
2.7×2.3×2.0×1.4×1.1×1.7×1.1×1.5×1.8×0.8×1.2×Current ratioCurr. ratio
$1.8B$1.9B$2.0B$2.1B$2.3B$2.4B$2.5B$2.7B$2.8B$3.2B$3.2BTotal assetsAssets
$387M$423M$498M$543M$524M$619M$640M$724M$769M$814M$901MTotal debtDebt
$291M$315M$415M$520M$479M$602M$628M$713M$748M$808M$891MNet debt / (cash)Net debt
$724M$778M$817M$856M$976M$1.0B$1.1B$1.1B$1.2B$1.3B$1.3BShareholders’ equityEquity
Per share
34.7M34.7M34.7M34.7M35.6M36.2M36.2M36.2M36.2M36.6M36.6MShares out (diluted)Shares
$15.71$16.24$16.15$16.41$15.13$16.77$19.75$19.08$18.68$20.33$20.96Revenue / shareRev/sh
$2.18$2.82$2.43$2.51$2.60$2.92$3.07$3.25$3.33$3.72$3.90EPS (diluted)EPS
$1.85$0.67$-1.71$-0.97$-0.86$-0.43$-0.59$0.43$1.13$-2.19$-3.57Owner earnings / shareOE/sh
$1.85$0.67$-1.71$-0.97$-0.86$-0.43$-0.59$0.43$1.13$-2.19$-3.57Free cash flow / shareFCF/sh
$1.21$1.26$1.32$1.38$1.45$1.51$1.59$1.67$1.75$1.85$1.87Dividends / shareDiv/sh
$2.41$3.12$6.12$4.73$5.70$4.24$4.84$6.14$6.54$9.39$10.83Cap. spending / shareCapex/sh
$20.89$22.45$23.56$24.68$27.41$28.41$29.90$31.51$33.95$35.65$36.85Book value / shareBVPS
Per-share growththe realized rate an owner's share compounded
9-yr5-yr
Revenue / share+2.9%/yr+6.1%/yr
EPS+6.1%/yr+7.4%/yr
Dividends / share+4.9%/yr+4.9%/yr
Capital spending / share+16.3%/yr+10.5%/yr
Book value / share+6.1%/yr+5.4%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count
37Mpeak FY2025
ROIC
7%low FY2020
Net debt ÷ owner earnings
18.3×peak FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($80M)owner earningsvs.$136Mnet incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $136M of profit but ($80M) of owner earnings: $216M less than the profit line, taken out by capital spending and the timing of cash.

FY2025FY2024FY2023FY2022FY2021
Reported net income$136M$121M$118M$111M$106M
Working capital & othertiming of cash in and out, other non-cash items+$127M+$157M+$120M+$43M+$32M
Cash from operations$263M$278M$238M$154M$138M
Capital expenditurecash put back in to keep running and to grow−$343M−$237M−$222M−$175M−$153M
Owner earnings($80M)$41M$15M($21M)($16M)
Owner-earnings marginowner earnings ÷ revenue-11%6%2%-3%-3%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

  • Can it pay its interest? 8.8×
    Comfortable
    Operating income $171M ÷ interest expense $19M
    What this means

    Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.

  • How heavy is the debt, net of cash? $808M · 4.7× operating profit
    Heavy net debt
    Cash $6M − debt $814M
    What this means

    Netting $6M of cash and short-term investments against $814M of debt leaves $808M owed, about 4.7× a year's operating profit (4.8× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

  • How long is cash tied up? —
    Not enough data
    What this means

    The filing data didn't include the inputs for this check.

Is it a good business?

  • Return on invested capital 7%
    Below average through the cycle
    10-yr median, range 6%–9%; 7% latest = NOPAT $148M ÷ invested capital $2.1B
    Industry peers: median 5%
    What this means

    The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

  • Owner-earnings margin -3%
    Consumes cash through the cycle
    10-yr median margin, range -11%–12%; latest ($80M) = operating cash $263M − maintenance capex $343M
    Industry peers: median 15%
    What this means

    What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -11% of revenue this year, a -3% median across 10 years.

  • Are earnings backed by cash? 1.94×
    Cash-backed
    Cash from ops $263M ÷ net income $136M
    What this means

    How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

  • Where do the earnings go? —
    No surplus to allocate
    What this means

    The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.

  • Investing or harvesting? —
    Not enough data
    What this means

    The filing data didn't include the inputs for this check.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

  • Adequate size Miss
    Revenue ≥ $2B · $744M
    What this means

    Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

  • Strong liquidity Miss
    Current ratio ≥ 2× · 0.77×
    What this means

    Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

  • Conservative debt Miss
    Debt ≤ working capital · $814M vs ($68M) WC
    What this means

    Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

  • Earnings stability Pass
    A profit every year (10-yr record) · no losses
    What this means

    Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

  • Dividend record Pass
    Uninterrupted dividends · paid every year (10)
    What this means

    An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

  • Earnings growth Pass
    Earnings +33% over the record · +45%
    What this means

    At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

  • Moderate price —
    P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
    What this means

    Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.39/share (latest year $3.70), the averaged base the calculator's gate runs on, and book value is $35.48/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

  • Profitable years 10 of 10
    What this means

    Never lost money over the record, the earnings stability Graham insisted on.

  • Return on capital ≥ 15% 0 of 10 yrs
    What this means

    A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

  • Operating margin 22% → 22% (3-yr avg ends)
    What this means

    Through the cycle the operating margin held roughly steady — about 22% early, 22% lately, median 20%.

  • Reinvestment, incremental ROIC 5%
    What this means

    Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.

  • Worst year 2022 · 19.3% op. margin
    What this means

    Stayed profitable even in its hardest year, the resilience that survives recessions.

  • Share count +0.6%/yr
    What this means

    Roughly flat share count, little dilution, little buyback.

  • Dividend record rising
    What this means

    Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$211M
  • Cash & short-term investments$9M
  • Receivables$59M
  • Other current assets$143M
Current liabilities$183M
  • Debt due within a year$20M
  • Accounts payable$57M
  • Other current liabilities$105M
Current ratio1.15×all current assets ÷ what's due · Graham looked for 2×
Quick ratio1.15×stricter: inventory excluded
Cash ratio0.05×strictest: cash alone against what's due
Working capital$28Mthe cushion left after near-term bills
Debt due this year vs. cash$20M due · $9M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Mar 31, 2026 balance sheet
Revenue, latest quarter vs. a year ago+10.8%the freshest read on whether the business is still growing
Current ratio, recent quarters1.3× → 1.2×
Deeper floors
Tangible book value$1.3Bequity stripped of goodwill & intangibles
Debt incl. operating leases$909M$8M of it operating leases

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $1.8B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

  • Reinvested$1.9B · 105%
  • Dividends$535M · 30%
  • Returned to owners$535M

    $535M as dividends and $0 as buybacks.

  • Source of funding−$631M

    Reinvestment and shareholder returns ran $631M beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $387M to $901M.

  • Net change in share count5.6%

    The diluted count rose from 35M to 37M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.

  • Dividend record$1.85/sh

    Paid in 10 of the years on record, the per-share dividend growing about 5% a year. It was never cut over the span.

  • Return on what it retained−4%

    Of the earnings it kept rather than paid out ($493M over the span), annual owner earnings (first three years vs last three) fell $17M, so each retained $1 gave back about 0.04 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal yearChief executivePay, as filed“Actually paid”Owner earnings
2021J. Keebler (PEO)$2.6M$2.2M($16M)
2022J. Keebler (PEO)$1.7M$1.6M($21M)
2023J. Keebler (PEO)$2.6M$2.2M$15M
2024J. Keebler (PEO)$2.1M$3.3M$41M
2025J. Keebler (PEO)$3.6M$2.6M($80M)

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

    Inverting the record

    Invert: instead of why MGE Energy is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

    3 of the 5 tests turned up something to look into; the other 2 came back clean.

    • Look hereIs it less profitable than it was?−0.8% vs 1.8%

      The owner-earnings margin averaged 1.8% early in the record and −0.8% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.

    • Look hereDid the share count rise anyway?5.6%

      Diluted shares grew 5.6% over 2016–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.

    • Look hereDid debt outgrow the business?$387M → $901M

      Debt rose from $387M to $901M while owner earnings went from about $9M to ($8M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

    And these came back clean
    • Did reported profit become cash?
    • Did receivables and inventory outpace sales?

    Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

    Peers, Multi-Utilities

    The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

    CompanyRevenueGross marginOp. marginROICOwner earn. margin
    DTMDT Midstream Inc. Common Stock$1.2B—51.1%5%59%
    ORAOrmat Technologies Inc.$990M37%25.6%4%11%
    CWTCalifornia Water Service$964M—16.5%5%15%
    CPKChesapeake Utilities Corporation$930M—22.3%7%16%
    HTOH2O America$806M—22.0%5%—
    MGEEMGE Energy$744M—20.8%7%-3%
    AWRAmerican States Water$658M89%28.3%10%17%
    UTLUNITIL Corporation$536M—16.9%7%-7%
    Group median——22.2%6%15%
    IV

    The price

    What a price has to assume.

    What the price implies

    reverse-DCF

    MGE Energy is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

    $
    The assumptions

    Revenue, delivered6%/yr’20→’25

    Enter a price to run it.

    Owner earnings it must reach—
    Margin the price demands—
    Owner-earnings margin today−17%

    Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

    Weigh MGEE against another business →

    The owners of MGEE: the meeting and the votes →

    Cite: Owner Scorecard, "MGE Energy (MGEE), the owner's record," https://ownerscorecard.com/c/MGEE, data as of 2026-07-09.

    Manual order: ← MG its page in the Manual MGM →

    Industry order: ← LNT the Multi-Utilities chapter NI →