Ameren Corp (NYSE: AEE)

Sector: Utilities Industry: Utilities - Regulated Electric CIK: 0001002910
Market Cap 23.47 Bn
P/B 3.28
P/E 41.40
P/S 3.09
ROIC (Qtr) 5.29
Div Yield % 2.49
Rev 1y % (Qtr) 24.21
Total Debt (Qtr) 20.10 Bn
Debt/Equity (Qtr) 1.57
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About

Ameren Corp., commonly known as AEE, operates in the utilities industry, with a focus on electric generation, transmission, and distribution, as well as natural gas distribution. The company's operations are based in the Midwest region of the United States, specifically in Missouri and Illinois. Ameren's business model revolves around generating revenue through its rate-regulated electric generation, transmission, and distribution businesses in Missouri and Illinois, as well as its natural gas distribution business in Illinois. The company's primary...

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Investment thesis

Bull case

  • Operating cash flow of 3.21B provides exceptional 642.80x coverage of minority interest expenses 5M, showing strong core operations.
  • Operating cash flow of 3.21B provides strong 119.04x coverage of stock compensation 27M, indicating sustainable incentive practices.
  • Tangible assets of 47.01B provide robust 42.31x coverage of other current liabilities 1.11B, indicating strong asset backing.
  • Operating cash flow of 3.21B provides solid 1.15x coverage of current liabilities 2.81B, showing strong operational health.
  • Retained earnings of 5.23B provide strong 4.71x coverage of other current liabilities 1.11B, indicating earnings quality.

Bear case

  • Operating cash flow of 3.21B barely covers its investment activities of (4.46B), with a coverage ratio of -0.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 9M against inventory of 804M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 3.21B provides thin coverage of dividend payments of (755M) with a -4.26 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (1.25B) provides weak coverage of capital expenditures of 4.46B, with a -0.28 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 2.24B show weak coverage of depreciation charges of 1.58B, with a 1.42 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Regulated Electric
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NEE Nextera Energy Inc 191.44 Bn 28.01 6.98 95.62 Bn
2 SO Southern Co 97.42 Bn 30.98 4.46 73.75 Bn
3 AEP American Electric Power Co Inc 64.38 Bn 33.83 4.24 0.00 Bn
4 DUK Duke Energy CORP 56.47 Bn 30.61 3.87 89.65 Bn
5 EXC Exelon Corp 48.53 Bn 17.53 2.00 50.08 Bn
6 ETR Entergy Corp /De/ 45.74 Bn 25.29 3.59 30.45 Bn
7 PEG Public Service Enterprise Group Inc 43.93 Bn 35.35 4.41 23.51 Bn
8 XEL Xcel Energy Inc 41.10 Bn 37.21 3.75 35.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.66 1.01
EV to Cash from Ops. EV/CFO 16.60 12.45
EV to Debt EV to Debt 1.56 171.92
EV to EBIT EV/EBIT 24.10 19.12
EV to EBITDA EV/EBITDA 15.71 15.67
EV to Free Cash Flow [EV/FCF] EV/FCF -232.94 -28.25
EV to Market Cap EV to Market Cap 1.34 1.84
EV to Revenue EV/Rev 4.14 4.72
Price to Book Value [P/B] P/B 3.28 2.60
Price to Earnings [P/E] P/E 41.40 18.53
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.87 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 53.50 62.23
Dividend per Basic Share Div per Share (Qtr) 2.80 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -60.67 -218.37
Interest Coverage Int. cover (Qtr) 3.02 2.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -5.66 -68.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -47.06 73.92
Dividend Growth (1y) % Div 1y % (Qtr) 6.06 4.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 24.76 15.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.38 13.33
EBIT Growth (1y) % EBIT 1y % (Qtr) 14.46 15.81
EBT Growth (1y) % EBT 1y % (Qtr) 14.25 19.29
EPS Growth (1y) % EPS 1y % (Qtr) 22.77 21.26
FCF Growth (1y) % FCF 1y % (Qtr) 28.44 -35.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.91 11.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.19 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.10 0.11
Cash Ratio Cash Ratio (Qtr) 0.00 0.98
Current Ratio Curr Ratio (Qtr) 0.93 2.72
Debt to Equity Ratio Debt/Equity (Qtr) 1.57 1.45
Interest Cover Ratio Int Coverage (Qtr) 3.02 2.83
Times Interest Earned Times Interest Earned (Qtr) 3.02 2.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 42.70 37.94
EBIT Margin % EBIT Margin % (Qtr) 25.01 316.94
EBT Margin % EBT Margin % (Qtr) 16.73 14.36
Gross Margin % Gross Margin % (Qtr) 39.00 41.20
Net Profit Margin % Net Margin % (Qtr) 15.80 12.57