Lower costs boost Ameren’s profit

Article Excerpt

AMEREN CORP. $76 is still a hold. The company (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 247.0 million; Market cap: $18.8 billion; Price-to-sales ratio: 3.4; Dividend yield: 2.6%; TSINetwork Rating: Average; www.ameren.com) supplies electricity and natural gas to 3.3 million customers in Illinois and Missouri. Ameren’s revenue in the three months ended June 30, 2020, rose 1.4%, to $1.39 billion from $1.38 billion a year earlier. Higher electricity demand from residential customers offset lower demand from commercial and industrial users due to COVID-19 shutdowns. Earnings per share jumped 36.1%, to $0.98 from $0.72, as costs to decommission a nuclear power plant hurt the year-earlier earnings. However, the company’s high reliance on coal (63% of its fuel needs) adds risk. Still, the $1.98 a share seems safe, and yields 2.6%. Ameren is a hold. hold…