Ameren Corp. (AEE) has increased its quarterly dividend by 2.5%, bringing the annualized payout to $1.64 per share from $1.60 per share earlier. The dividend increase will be effective from the fourth quarter of 2014. The quarterly dividend, after the hike, will come to 41 cents per share from the prior payment of 40 cents per share. The increased quarterly dividend will be payable on Dec 31, 2014, to shareholders of record as of Dec 10, 2014.
With a market cap of $9.60 billion, this St. Louis-based company generates and distributes electricity and natural gas to residential, commercial, industrial and wholesale end markets in Missouri and Illinois.
Utilities have been known to pay dividends consistently, thereby retaining the confidence of yield hungry investors and proving the sector's defensive characteristics. Ameren is no exception to this trend.
Ameren Corp. is also engaged in systematic investments in growth projects and infrastructure upgrade activities. In the first half of 2014, the company spent around $0.9 billion as capital expenditure, up 53.6% from the prior-year comparable figure.
The company is progressing on several of its important projects, including the $1.1 billion Illinois Rivers project (a regulated electric transmission project), replacement of the reactor vessel head for Callaway Energy Center, upgrade of electrostatic precipitators at the coal-fired Labadie Energy Center and the construction of a new substation in downtown St. Louis as well as an investor-owned solar facility called O’Fallon Renewable Energy Center. The scheduled completion of these projects will enable the company to provide reliable services to its customers, besides meeting increasing demand.
Following its exit from the merchant generation business – Ameren Energy Resources Company – Ameren Corp. is currently concentrating on its rate-regulated utilities. Post divestiture, we expect Ameren Corp. to witness modestly rising earnings from its core utilities, primarily on the back of addition in rate base through environmental spending, additions to transmission lines and basic maintenance and repair of infrastructure. The company expects earnings per share to increase at a compound annual rate of 7% to 10% within the time span of 2013 to 2018.
Ameren currently has a Zacks Rank #3 (Hold). Other better-ranked players in the utility industry include Korea Electric Power Corp. (KEP), IdaCorp, Inc. (IDA) and NRG Yield, Inc. (NYLD). All three stocks carry a Zacks Rank #1 (Strong Buy).
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
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment