American Electric Power (NASDAQ:AEP – Get Free Report) and Ameren (NYSE:AEE – Get Free Report) are both large-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.
Dividends
American Electric Power pays an annual dividend of $3.80 per share and has a dividend yield of 2.9%. Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.6%. American Electric Power pays out 61.4% of its earnings in the form of a dividend. Ameren pays out 52.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Electric Power has increased its dividend for 15 consecutive years and Ameren has increased its dividend for 12 consecutive years. American Electric Power is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
American Electric Power has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.
Earnings and Valuation
This table compares American Electric Power and Ameren”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Electric Power | $21.88 billion | 3.22 | $3.58 billion | $6.19 | 20.88 |
| Ameren | $8.80 billion | 3.56 | $1.46 billion | $5.68 | 19.94 |
American Electric Power has higher revenue and earnings than Ameren. Ameren is trading at a lower price-to-earnings ratio than American Electric Power, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares American Electric Power and Ameren’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Electric Power | 14.21% | 10.52% | 2.91% |
| Ameren | 17.86% | 10.95% | 3.00% |
Analyst Ratings
This is a summary of current ratings and recommmendations for American Electric Power and Ameren, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Electric Power | 0 | 8 | 16 | 0 | 2.67 |
| Ameren | 0 | 7 | 13 | 0 | 2.65 |
American Electric Power presently has a consensus target price of $139.83, suggesting a potential upside of 8.19%. Ameren has a consensus target price of $117.43, suggesting a potential upside of 3.68%. Given American Electric Power’s stronger consensus rating and higher probable upside, equities analysts plainly believe American Electric Power is more favorable than Ameren.
Institutional & Insider Ownership
75.2% of American Electric Power shares are owned by institutional investors. Comparatively, 79.1% of Ameren shares are owned by institutional investors. 0.1% of American Electric Power shares are owned by company insiders. Comparatively, 0.3% of Ameren shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
American Electric Power beats Ameren on 10 of the 17 factors compared between the two stocks.
About American Electric Power
American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, renewable, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.
About Ameren
Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.
Receive News & Ratings for American Electric Power Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American Electric Power and related companies with MarketBeat.com's FREE daily email newsletter.
