AMEREN CORP. $40 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $9.7 billion; Price-to-sales ratio: 1.6; Dividend yield: 4.1%; TSINetwork Rating: Average; www.ameren.com) provides power and natural gas to 3.3 million clients in Illinois and Missouri.
In the three months ended March 31, 2015, warmer-than-usual winter weather prompted Ameren’s customers to use less power and gas for heating. That cut its revenue by 2.4%, to $1.56 billion from $1.59 billion a year earlier.
However, the company recently refinanced some debt at lower rates. That reduced its interest charges, boosting earnings by 11.3%, to $108 million, or $0.45 a share, from $97 million, or $0.40.
Ameren expects to spend $9.3 billion on plant upgrades between 2015 and 2019. Coal accounts for over 70% of the fuel it uses, so these improvements will also help it comply with tougher environmental regulations.
The stock trades at 15.7 times Ameren’s likely 2015 earnings of $2.55 a share. The $1.64 dividend yields 4.3%.
Ameren is a hold.
