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Here's Why You Should Add Ameren (AEE) to Your Portfolio

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Estimates for Ameren Corporation (AEE - Free Report) have been revised upward in the past 60 days, reflecting analysts’ optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings have moved up 3% and 0.3%, respectively.

Shares of Ameren have improved 10.7% in the past 12 months, against the industry’s decline of 3.3%.

Let’s focus on the factors that make Ameren an attractive stock to hold in.

Zacks Rank & Surprise History

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ameren pulled off an average positive earnings surprise of 15.40% in the last four quarters.

Growth Projections

The Zacks Consensus Estimate for 2018 earnings per share is pegged at $3.37, reflecting year-over-year improvement of 19.08%. Its long-term earnings growth rate is at 6.80%.

The Zacks Consensus Estimate for 2018 revenues is pegged at $6.28 billion, reflecting year-over-year rise of nearly 1.64%.

VGM Score

Ameren has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Systematic Investments

Ameren is focused on systematic investments in growth projects, infrastructure upgrades, electric transmission and delivery infrastructure. The company expects an expenditure of $2.2 billion for 2018. Over 2018 to 2022 time frame, the company expects to spend up to $11.4 billion, comprising up to $4.5 billion, $6.6 billion and $0.3 billion for Ameren Missouri, Ameren Illinois and ATXI during 2018-2022, respectively.

These investments are aimed to support overall system reliability, environmental compliance as well as electric and natural gas utility infrastructure improvements. Also, the company expects additional investment of $1 billion to modernize the Ameren Missouri electric grid along with installation of smart meters and deployment of advance technologies through 2018-2023.

Other Stocks to Consider

A few other top-ranked stocks from the same industry are Pinnacle West Capital Corporation (PNW - Free Report) , IDACORP, Inc (IDA - Free Report) and FirstEnergy Corp (FE - Free Report) . All three stocks hold a Zacks Rank #2.

Long-term earnings growth of Pinnacle West Capital, IDACORP and FirstEnergy is pegged at 4.47%, 2.80% and 6%, respectively.

The Zacks Consensus Estimate for 2018 earnings for Pinnacle West Capital, IDACORP and FirstEnergy moved up 0.7%, 3.7% and 3.6% in the past 90 days, respectively.

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