Ameren Corporation’s (AEE Quick QuoteAEE - Free Report) systematic investments in growth projects, infrastructure upgrades and the addition of clean energy to its portfolio are expected to improve service reliability and generate higher profits.

However, this Zacks Rank #3 (Hold) company incurs high expenses for compliance with air emission regulations. The increasing debt level amid rising interest rates is a concern.

Tailwinds

Ameren’s growth has been fueled by its systematic and consistent investments in growth projects and infrastructural upgrades. During 2023-2027, the company expects to spend up to $20.5 billion for its multiple business segments.

AEE also has a solid pipeline of regulated infrastructure investments of more than $48 billion in the 2023-2032 period. These investments are aimed at supporting the company’s overall system reliability, environmental compliance and utility infrastructure improvements.

In order to create a renewable portfolio, Ameren plans to offer electricity through cleaner and more diverse sources of energy generation. It also aims to add 4,700 megawatts (MW) of renewable generation and 800 MW of battery storage by the end of 2040. Apart from these, the company is also closing its coal-fired plants to reduce carbon dioxide emissions and promote green energy.

Headwinds

Ameren has to bear high expenditures in order to comply with air emission regulations. It has high current and long-term debt levels, and a low cash balance. These factors act as potential growth deterrents for the company.

Stocks to Consider

Some better-ranked utilities in the same industry are NiSource Inc. (NI Quick QuoteNI - Free Report) , NorthWestern Corporation (NWE Quick QuoteNWE - Free Report) and Avista Corporation (AVA Quick QuoteAVA - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NiSource’s long-term (three to five-year) earnings growth rate is 6.9%. The Zacks Consensus Estimate for NI’s 2023 earnings per share (EPS) indicates an increase of 6.8% from the previous year’s figure.

NorthWestern’s long-term earnings growth rate is 6.8%. The Zacks Consensus Estimate for NWE’s 2023 EPS implies an improvement of 9.4% from the 2022 level.

Avista’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for AVA’s 2023 EPS indicates growth of 9.4% from the previous year’s number.