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Ameren (AEE) Gains on Consistent Investments in Growth Projects

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We recently issued an updated research report on Ameren Corporation (AEE - Free Report) . The company’s first-quarter 2021 earnings of 91 cents per share from continuing operations exceeded the Zacks Consensus Estimate of 79 cents by 15.2%.

Ameren serves nearly 2.4 million electric and more than 900,000 gas customers.

What’s Driving the Stock?

Ameren’s growth has been led by its systematic and consistent investments in growth projects and infrastructure upgrade. During the 2021-2025 period, the company expects to spend up to $17.8 billion, comprising up to $9.3 billion, $8.2 billion and $0.2 billion for Ameren Missouri, Ameren Illinois and ATXI, respectively. This reflects an improvement of 11.3% from the company’s previous five-year investment plan worth $16 billion for the 2020-2024 period.

Further, the company projects a solid pipeline of regulated infrastructure investments of more than $20 billion in the 2025-2029 period. These investments are aimed at supporting overall system reliability, environmental compliance, and electric and natural gas utility infrastructure improvements.

Apart from investing in renewable projects, Ameren is closing its coal-fired plants to reduce carbon dioxide emissions and promote green energy. Over the long-term, the company aims to expand renewable sources by adding 3,100 MWs of renewable generation by the end of 2030. The aforementioned initiatives will enable the company to duly meet these targets.

However, Ameren has to bear high expenditures to comply with air emission regulations, including burning ultra-low-sulfur coal and installing new or optimizing existing pollution control equipment.

Zacks Rank & Stocks to Consider

Ameren currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are Hawaiian Electric Industries, Inc. (HE - Free Report) , Otter Tail Corporation (OTTR - Free Report) and CMS Energy Corporation (CMS - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hawaiian Electric Industries currently has a long-term earnings growth rate of 7.10%. The Zacks Consensus Estimate for 2021 earnings has increased 8.8% to $1.97 in the past 60 days.

Otter Tail Corporation delivered average positive earnings surprise of 16.76% in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has climbed 4.1% to $2.55 in the past 60 days.

CMS Energy Corporation came up with average positive earnings surprise of 6.84% in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has risen 1.1% to $2.88 in the past 60 days.

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