Estimates for Ameren Corporation AEE have been revised upward over the last 60 days, reflecting analysts’ optimism in the stock post impressive first-quarter 2018 results. The Zacks Consensus Estimate for 2018 and 2019 earnings have moved up 0.7% and 1% to $3.04 and $3.23, respectively.
Shares of Ameren have returned 3.7% in the past 12 months versus the Utility – Electric Power industry’s decline of 6.0%. Ameren carries a Zacks Rank #2 (Buy).
The company has a dividend yield of 3.11%, better than the S&P 500 index’s average of 1.76%.
Let’s focus on the factors that make Ameren an attractive stock to invest in.
Earnings Result and Surprise Trend: Ameren reported first-quarter 2018 earnings of 62 cents per share from continuing operations, which surpassed the Zacks Consensus Estimate of 58 cents by 6.9%. The company has an impressive earnings surprise history. It pulled off an average positive earnings surprise of 7.69 % in the last four quarters.
Strong Capital Expenditure: Ameren continues to invest systematically in growth projects and infrastructure upgrade. The company had invested $2.1 billion in 2017 and plans to invest $2.2 billion in 2018. The company expects to spend up to $11.4 billion through 2018-2022.
Hiked Dividend: A stable financial position enables Ameren to raise shareholders’ value through the payment of regular dividends and repurchase of shares. The company paid dividends of $111 million in the first quarter, up from $107 million in the prior-year quarter. Moreover, Ameren expects dividend payout ratio between 55% and 70% of annual earnings over the next few years.
Focus on Renewables: Ameren plans to offer electricity through cleaner and more diverse sources of energy generation, which includes solar, wind, natural gas, hydro and nuclear power. The company aims at expanding renewable sources by adding at least 700 megawatts (MW) of wind generation by 2020 in Missouri as well as neighboring states and adding 100 MW of solar generation over the next 10 years.
Other Stocks to Consider
A few other top-ranked stocks from the same space are Alliant Energy Corporation LNT, Duke Energy Corporation DUK and WEC Energy Group, Inc WEC. All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alliant Energy pulled off a positive earnings surprise of 1.96% in the last reported quarter. The Zacks Consensus Estimate for 2018 EPS moved up by a penny in the last 60 days.
Duke Energy had a positive earnings surprise of 11.30% in the last reported quarter. The Zacks Consensus Estimate for 2018 EPS moved up by a penny in the last 60 days.
WEC Energy pulled off a positive earnings surprise of 6.03% in the last reported quarter. The Zacks Consensus Estimate for 2018 EPS moved up by a penny in the last 60 days.
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