Ameren Corporation AEE announced that the board of directors has approved a 6% increase in the quarterly dividend rate. Following the board's approval, the company’s share price rose 0.2% to reach $97.26 on Feb. 13, 2025.

AEE’s revised quarterly dividend will now be 71 cents, payable on March 31, 2025, to shareholders of record at the close of the business on March 11, 2025. This is the 12th consecutive year that the company has increased dividends on its common shares.

AEE’s new annualized dividend rate is $2.84. Following the hike, the company’s dividend yield is 2.92%, better than the Zacks S&P 500 composite’s 1.19%.

Can Ameren Sustain Dividend Hikes?
 

Ameren plans to invest $21.9 billion. This includes up to $13 billion, $4.8 billion and $4.1 billion for Ameren Missouri, Ameren Illinois and Ameren Transmission, respectively, between 2024 and 2028.

The company also expects to invest more than $55 billion in regulated infrastructure between 2024 and 2033. Such investments aim to make the company's entire system more reliable and environmentally friendly, as well as modernize its electric and natural gas transmission and distribution grids.

This significant capital outlay should boost the company's infrastructure and grid enhancement and thereby enable it to provide improved utility service to a wide customer base. This should result in more earnings generation and, in turn, provide Ameren with sufficient funds to reward its shareholders with steady dividend hikes, like the latest one.  

The company has also been undertaking initiatives to enhance financial strength and improve the core business, which should also offer its management enough funds to continue with its shareholder-friendly initiatives in the future.

Other Utility Companies’ Recent Dividend Hikes
 

Utilities, due to their domestic focus and rate-regulated operations, generate a stable income, which allows them to increase shareholder value through stable dividend payments and buybacks. The demand for utility services remains the same during different economic cycles, and utilities are often considered bond substitutes due to their ability to distribute regular dividends. A few such utilities have been mentioned below, who have recently decided to share more profits with their shareholders through dividend hikes.

On Jan. 29, 2025, Eversource Energy ES announced that its board of directors approved a 5.2% hike in its quarterly dividend to 75.25 cents per share.

Eversource boasts a long-term (three to five years) earnings growth rate of 5.5%. The Zacks Consensus Estimate for ES’ 2025 sales implies an improvement of 8.7% from the previous year’s estimated level.

On Jan. 29, 2025, Unitil Corporation UTL announced that its board of directors approved a 5.9% hike in its quarterly dividend to 45 cents per share.

The Zacks Consensus Estimate for UTL’s 2025 sales implies an improvement of 12.8% from the prior-year figure. The Zacks Consensus Estimate for UTL’s 2025 earnings suggests an improvement of 3.7% from the prior-year figure.

On Jan. 23, 2025, NiSource Inc. NI announced that its board of directors approved a 5.7% hike in its quarterly dividend to 28 cents per share.

NiSource boasts a long-term earnings growth rate of 8%. The Zacks Consensus Estimate for NI’s 2025 sales implies an improvement of 7.3% from the previous year’s estimated level.

AEE Stock Price Movement
 

In the past six months, AEE shares have rallied 19.7% compared with the industry’s growth of 2.7%.

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AEE’s Zacks Rank
 

Ameren Corporation currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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