Quantcast

Ameren (AEE) to Gain From Renewables & Infrastructure Upgrade


Shutterstock photo

We recently issued an updated research report on Ameren Corporation AEE . The company delivered second-quarter 2018 adjusted earnings of 97 cents per share, surpassing the Zacks Consensus Estimate of 79 cents by 22.8%. Moreover, the bottom line improved 22.8% from the year-ago period's figure.

Ameren intends to invest nearly $11.4 billion in supporting overall system reliability, environmental compliance and infrastructural upgrades.

What's Driving the Stock?

In renewables, Ameren has plans to generate electricity through cleaner and more diverse sources of energy including solar, wind, natural gas, hydro and nuclear power. Notably, the company aims at expanding renewable sources, adding at least 700 megawatts (MW) of wind generation by 2020 in Missouri and the neighboring states and further supplementing 100 MW of solar generation over the next 10 years.

These new renewable energy sources will facilitate Ameren Missouri's compliance with the Missouri state's requirement of achieving 15% of native load sales from renewable energy sources by 2021, subject to customer rate increase limitations. Moreover, these endeavors will allow Ameren Missouri to realize its goal of reducing 80% CO2 emissions by 2050 from a 2005 base level.

The company aims at investing capital to improve its overall system reliability, environmental compliance and electric plus natural gas utility infrastructure. To this end, during the first half of 2018, the company spent $484 million capital and estimates the overall capex to be $2.2 billion for 2018. Also, over the 2018-2022 period, the company anticipates to incur a capex of $11.4 billion.

Also, a stable financial position enables Ameren to augment shareholder value through payment of regular dividends and share repurchases. Last October, Ameren's management approved a 4% hike in quarterly cash dividend on its common stock from the prior quarterly tally, thus resulting in an annualized equivalent dividend rate of $1.83. Going forward, Ameren expects its dividend payout ratio to be between 55% and 70% of annual earnings over the next few years.

Estimates for Ameren have been revised upward over the past 30 days. Notably, the Zacks Consensus Estimate for the company's 2018 and 2019 bottom line has moved 2.6% and 0.3% north to $3.21 and $3.26 per share, respectively. Also, the company's bottom line exceeded the consensus mark in three of the trailing four quarters with an average beat of 7.69%.

Ameren Corporation Price

Ameren Corporation Price | Ameren Corporation Quote

Zacks Rank & Other Key Picks

Ameren currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here . Some other top-ranked stocks from the Zacks Utility - Electric Power Industry are as follows:

NRG Energy, Inc. NRG sports a Zacks Rank #1. The stock has seen the Zacks Consensus Estimate for 2018 earnings per share move 5.6% north over the past 30 days to $4.14.

Algonquin Power & Utilities Corp. AQN is a Zacks # 2 Ranked player. The stock has seen the Zacks consensus estimate for current-year earnings being revised 3% upward over the past 30 days to 68 cents per share.

IDACorp, Inc. IDA carries a Zacks Rank of 2. The stock has seen the Zacks Consensus Estimate for 2018 bottom line per share being raised 1.4% over the past 30 days to $4.28.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>


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 Corporation (AEE): Free Stock Analysis Report

NRG Energy, Inc. (NRG): Free Stock Analysis Report

IDACORP, Inc. (IDA): Free Stock Analysis Report

Algonquin Power & Utilities Corp. (AQN): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: AEE , NRG , IDA , AQN



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?