Two utility stocks — but only one’s a buy

Article Excerpt

AMEREN CORP. $52 (New York symbol AEE; WSSF Rating: Average) has 2.3 million electric customers and 900,000 natural gas customers in Missouri and Illinois. The company aims to cut its operating costs over the next three years by $65 million, mainly by cutting finance and administrative staff. To put this target in context, Ameren earned $280 million in the three months ended September 30, 2005, up 20.7% from $232 million a year earlier. However, per-share profit grew just 14.2%, to $1.37 from $1.20, due to more shares outstanding. Revenue jumped 46.2%, to $1.9 billion from $1.3 billion, mainly due to last year’s acquisition of Illinois Power Company. Coal supplies about 85% of Ameren’s fuel needs, but rising prices and environmental concerns have prompted the company to consider building a second unit at its 21-year old nuclear power facility west of St. Louis. The project would cost at least $2 billion, and take at least 10 years to complete. Although companies often underestimate…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.