Ameren Corporation (AEE) increased its quarterly dividend by 3.9% to 40 cents per share from its previous dividend of 38.5 cents. This results in an annualized dividend of $1.60 per share as against the prior dividend of $1.54.
The increased quarterly dividend will be payable on December 30, 2011, to shareholders of record on December 7, 2011. On September 30, 2011, the company had paid a quarterly dividend of 38.5 cents per share, to shareholders of record on September 8, 2011. Earlier, in February 2009, the company had lowered its quarterly dividend from 63.5 cents per share to 38.5 cents.
In August this year, Ameren Corporation had reported its second quarter 2011 results with pro forma earnings of 59 cents per share, far below the prior-year figure of 73 cents. It missed the Zacks Consensus Estimate of 62 cents as well.
Ameren reported cash and cash equivalents of $378 million at the end of the quarter compared with $506 million in the year-ago period. Long-term debt, net decreased minimally to $6.9 billion versus $7.0 billion at the end of second quarter 2011.
On November 4, 2011, the company is expected to release its third quarter earnings results. The Zacks Consensus Estimates for third quarter 2011 and fiscal year 2011 are currently at $1.22 per share and $2.37 per share, respectively.
Ameren’s stable and regulated electric power operations in the Midwest generate a relatively steady and growing earnings stream. Future growth will be guided by improved plant operations, a focus on cost management, rate relief in Missouri, a recovering economy boosting industrial sales and installation of emissions reduction equipment at its generation plants.
However, valuation continues to be restrained by merchant generation, its predominantly coal-based generation assets and pending regulatory cases. Given these headwinds, we believe that Ameren’s current valuation adequately reflects its fairly balanced risk/reward profile. As such, we see limited upside from current levels.The company presently retains a short-term Zacks #2 Rank (Buy). We have a long-term Neutral recommendation on the stock.
St. Louis-based Ameren Corporation owns a diverse mix of electric energy centers strategically located in the Midwest, with a generating capacity of more than 16,500 megawatts. Ameren owns electric plants with a generating capacity of more than 16,600 MW. Ameren operates in three segments: Missouri Regulated, Illinois Regulated and Non-rate-regulated Generation. Some of its main competitors include CenterPoint Energy, Inc. (CNP) and Exelon Corp. (EXC).
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