Advertisement
Australia markets closed
  • ALL ORDS

    8,050.20
    -23.90 (-0.30%)
     
  • ASX 200

    7,788.10
    -25.50 (-0.33%)
     
  • AUD/USD

    0.6467
    -0.0073 (-1.11%)
     
  • OIL

    85.45
    +0.43 (+0.51%)
     
  • GOLD

    2,360.20
    -12.50 (-0.53%)
     
  • Bitcoin AUD

    96,792.53
    -6,951.57 (-6.70%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6073
    -0.0017 (-0.29%)
     
  • AUD/NZD

    1.0885
    -0.0012 (-0.11%)
     
  • NZX 50

    11,931.32
    -2.99 (-0.03%)
     
  • NASDAQ

    18,003.49
    -304.50 (-1.66%)
     
  • FTSE

    7,995.58
    +71.78 (+0.91%)
     
  • Dow Jones

    37,983.24
    -475.84 (-1.24%)
     
  • DAX

    17,930.32
    -24.16 (-0.13%)
     
  • Hang Seng

    16,721.69
    -373.34 (-2.18%)
     
  • NIKKEI 225

    39,523.55
    +80.92 (+0.21%)
     

Ameren (AEE) Rewards Shareholders With 6.3% Dividend Hike

Ameren Corporation AEE recently announced that its board of directors has approved a 6.3% increase in its quarterly dividend rate. The revised quarterly dividend will be 67 cents, payable on Mar 29, 2024, to shareholders of record at the close of business on Mar 13, 2024.

The company’s new annualized dividend rate is $2.68 per share, resulting in an annualized dividend yield of 3.9%, based on its share price of $68.67 as of Feb 9, 2024. The company’s current dividend yield is better than the Zacks S&P 500 composite’s 1.31% as well as the industry’s 3.62%.

AEE’s History of Dividend Payment

The companies that are involved in utility services generally have stable operations and earnings. Consistent performance and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.

Ameren has been consistently increasing dividends for the last 11 years. During the nine months ended Sep 30, 2023, Ameren paid $496 million as dividend on common stock to its shareholders, which came in 8.5% higher than the amount it paid a year ago.

Can We Expect Hikes in the Coming Years?

Ameren’s dividend payment history indicates that the company has been performing steadily and generating enough cash flow to distribute dividends to shareholders.

ADVERTISEMENT

As of Sep 30, 2023, Ameren had a total cash and cash equivalents of $8 million. For nine months ended Sep 30, 2023, the company had cash inflow from operating activities worth $2,031 million, reflecting an improvement of 27% from the previous year.

It is imperative to mention that meaningful returns from a company’s investments allow it to duly reward its shareholders. Notably, Ameren has been making and is expected to continue to make systematic investments to strengthen its electric and natural gas infrastructure. During the 2023-2027 time period, AEE plans to spend $19.7 billion. It projects a solid pipeline of regulated infrastructure investments of more than $48 billion between 2023 and 2032.

These investments will allow the company to generate strong cash flows. Such solid cash should enable Ameren to duly offer attractive returns to its shareholders in terms of robust dividend payouts.

For 2023-2027, Ameren is committed to delivering 6-8% earnings per share growth. The company aims for a target payout of 55-70%. This reinforces its financial prowess through strong earnings and its ability for enhanced dividend disbursements.

Utilities’ Legacy of Dividend Payment

Ameren is not the only one in the utility space with a long dividend payment history. Many other utilities boast a track record of increasing dividends and have done so recently. Some of these are:

CMS Energy CMS: On Feb 1, 2024, CMS Energy raised its quarterly dividend to 38.75 cents. The company’s new annualized dividend rate is 51.50 cents per share, marking a 5.6% increase from the prior rate.

The current dividend yield of CMS is 3.67%, better than the Zacks S&P 500 composite’s yield of 1.31%. The stock’s long-term (three to five years) earnings growth is pegged at 7.7%.

NRG Energy NRG: On Jan 19, 2024, NRG Energy raised its quarterly dividend to 40.75 cents, marking an 8% increase. The company’s new annualized dividend rate is $1.63 per share. NRG’s payout currently is 29% of earnings.

The current dividend yield of NRG is 3.11%, better than the Zacks S&P 500 composite’s yield of 1.31%. The stock’s long-term earnings growth is pegged at 13.8%.

Alliant Energy LNT: On Jan 12, 2024, Alliant raised its quarterly dividend to 48 cents, marking a 6.1% increase. The company’s new annualized dividend rate is $1.92 per share. LNT’s payout currently is 65% of earnings.

The current dividend yield of LNT is 4.01%, better than the Zacks S&P 500 composite’s yield of 1.31%. The stock’s long-term earnings growth is pegged at 6.2%.

Price Performance

Over the past month, shares of AEE have lost 4.4% compared with the industry’s 5.2% decline.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank

Ameren currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Ameren Corporation (AEE) : Free Stock Analysis Report

NRG Energy, Inc. (NRG) : Free Stock Analysis Report

CMS Energy Corporation (CMS) : Free Stock Analysis Report

Alliant Energy Corporation (LNT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research