Ameren Corporation’s AEE systematic investments in infrastructural upgrades like grid strengthening allow it to efficiently serve customers, boosting its performance. Its growth prospects, robust ROE, low debt and strong dividend history make AEE a solid investment option in the Zacks Utility Electric Power industry.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

AEE’s Growth Projection
 

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased by 0.2% to $4.94 per share over the past 30 days. The Zacks Consensus Estimate for AEE’s 2025 revenues is pegged at $8.08 billion, which implies a year-over-year increase of 6%.

The company’s long-term (three to five years) earnings growth rate is 6.7%.

AEE’s Return on Equity
 

Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, AEE’s ROE is 10.34%, higher than the industry’s average of 9.89%. This indicates that the company has been utilizing funds more constructively than the electricity utility industry.

AEE’s Debt Position
 

Currently, AEE’s total debt to capital is 60.46%, better than the industry’s average of 61.69%.

AEE’s times interest earned ratio (TIE) at the end of the fourth quarter of 2024 was 2.9. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

Dividend History of AEE
 

Ameren has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is 71 cents per share, resulting in an annualized dividend of $2.84. The company’s current dividend yield is 2.86%, better than the Zacks S&P 500 composite's average of 1.26%.

AEE’s Systematic Investments
 

Ameren’s growth has been led by its systematic investments in growth projects and infrastructural upgrades to improve customer service. Over the 2025-2029 period, the company wants to invest $27.4 billion, comprising up to $17.5 billion, $5.1 billion and $4.8 billion for Ameren Missouri, Ameren Illinois and Ameren Transmission, respectively.

The company expects to invest more than $63 billion in regulated infrastructure between 2025 and 2034. These initiatives aim to improve Ameren's overall system dependability and environmental compliance and modernize its electric and natural gas transmission and distribution grids.

AEE Stock Price Performance
 

In the past three months, AEE stock has risen 10.5% compared with the industry’s growth of 2.8%.

Image Source: Zacks Investment Research

Other Stocks to Consider
 

A few other top-ranked stocks from the same industry are CMS Energy Corporation CMS, NiSource Inc. NI and CenterPoint Energy CNP, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CMS’ long-term earnings growth rate is 7.7%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.60, which indicates a year-over-year improvement of 7.8%.  

NI’s long-term earnings growth rate is 8.2%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.91, which suggests a year-over-year rise of 9.1%.  

CNP’s long-term earnings growth rate is 7.1%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.75, which calls for a year-over-year improvement of 8%.

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Ameren Corporation (AEE) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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