Stock of the Day

January 8, 2024

Ameren (AEE)

$98.52
+$1.31 (+1.3%)
Market Cap: $26.24B

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.

Ameren Bull Case

Here are some ways that investors could benefit from investing in Ameren Co.:

  • Ameren Co. recently declared a quarterly dividend of $0.71 per share, which is an increase from the previous $0.67. This reflects the company's commitment to returning value to shareholders, with an annualized dividend of $2.84 and a yield of 2.90%.
  • The company reported earnings per share (EPS) of $0.77 for the latest quarter, showing a significant year-over-year increase from $0.60. This growth indicates improving profitability and operational efficiency.
  • Analysts have a consensus rating of "Moderate Buy" for Ameren Co., with a target price of $92.00. This suggests that there is positive sentiment in the market regarding the stock's potential for appreciation.
  • Ameren Co. has a solid net margin of 15.52% and a return on equity of 10.09%, indicating effective management and profitability relative to shareholder equity.
  • Recent analyst upgrades, including a price target increase from BMO Capital Markets to $98.00 and from Evercore ISI to $104.00, suggest that market experts see strong potential for growth in the stock.

Ameren Bear Case

Investors should be bearish about investing in Ameren Co. for these reasons:

  • Ameren Co. missed analysts' consensus EPS estimates of $0.83 by $0.06, which may raise concerns about its ability to meet future earnings expectations.
  • The stock has seen insider selling, with the CFO selling 6,500 shares at an average price of $92.15, indicating potential lack of confidence from company executives.
  • Despite the recent dividend increase, the company's dividend payout ratio stands at 63.06%, which may limit its ability to reinvest in growth opportunities or sustain dividends in the future.
  • One research analyst has rated the stock with a sell rating, which could indicate potential risks or concerns that may not be fully reflected in the current stock price.
  • Market volatility and economic uncertainties could impact utility stocks like Ameren Co., making it essential for investors to consider broader market conditions before investing.

Recent News