On July 10, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Ameren Corporation has been witnessing rising earnings estimates on
the back of strong earnings performance. The supplier of
electricity and natural gas to over 3.3 million customers delivered
positive earnings surprises in 3 of the last 4 quarters with an
average beat of 18.69%. The long-term expected earnings growth rate
for this stock is 7.5%
To maintain its performance over the long run, Ameren Corporation
has long-term investment plans aimed at strengthening its
operations. The company intends to invest a total of $8.3 billion
on regulated infrastructure between 2014 and 2018, with roughly
$1.83 billion allocated for 2014. Ameren's 2014 spending projection
reflects a 32.6% year-over-year jump.
Ameren Corporation is progressing well on its Illinois Rivers
Transmission Project and plans to invest $1.4 billion in its Ameren
Illinois & Ameren Transmission Company of Illinois (ATXI)
ventures. The scheduled completion of these projects will enable
Ameren to provide uninterrupted services to its customers.
Ameren's focus on rate regulated operations is expected to provide
stability to its revenue stream. Moreover, the company disburses
regular dividends with a long-term plan to increase the payout
ratio to a band of 55% and 70%. This will keep the investors
Based on strong fundamentals, the company raised its earnings per
share projection for 2014 to a range of $2.30-$2.50 from
$2.25-$2.45. The company expects earnings per share to increase at
a 7% to 10% compound annual growth rate from 2013 through 2018.
Over the last 30 days, the Zacks Consensus Estimate for 2014
increased 12.7% to $2.37 per share as two estimates were revised
higher while, for 2015, one positive estimate revision lifted the
consensus by 7.8% to $2.55 per share.
Other well-ranked operators in the utility space include
Consolidated Edison, Inc.
Wisconsin Energy Corp.
American Electric Power Co., Inc.
). Consolidated Edison and Wisconsin Energy carry the same Zacks
Rank as Ameren, while American Electric Power holds a Zacks Rank #2
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AMEREN CORP (AEE): Free Stock Analysis Report
AMER ELEC PWR (AEP): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis
CONSOL EDISON (ED): Free Stock Analysis Report
To read this article on Zacks.com click here.