StockCall Scrutinizes Exelon and Ameren: Diversified Power Companies Diversify
LONDON, February 15, 2013
LONDON, February 15, 2013 /PRNewswire/ --
Diversified power companies are dealing with a wide number of issues. While
the sector benefits from the soft prices prevailing for coal and natural gas,
it is also faced with the growing pressure of environmental regulations.
Ameren Corporation (NYSE: AEE) decided to get out of power generation business
due to soft demand and excessive regulation. On the other hand, Exelon
Corporation (NYSE: EXC) suffers from low margins as it is invested in nuclear
power generation and hence does not benefit from decline in coal prices.
StockCall reviewed the solar industry and chose Exelon and Ameren for its
technical coverage. These free reports can be seen for free at
Ameren Announces Quarterly Dividend
Ameren Corporation recently announced its quarterly dividend at 40 cents per
share, pushing its dividend yield to impressive 4.83 percent. The company is
also scheduled to announce its quarterly numbers on February 20 ^th . It is
expected to report its net income at 24 cents per share while its revenue is
likely to be at $1.76 billion for the quarter. While the stock appreciated
over 7 percent this calendar year, it is likely to be negatively affected by
the decline in the company's revenue. Register for today's free analysis on
Ameren Corporation at http://www.StockCall.com/AEE021513.pdf
Ameren is a utility holding company and is based out of St. Louis. It recently
received five years extension to comply with Illinois environmental
regulations. It runs three natural gas and five coal powered plants in the
state. However, the company is looking to streamline its business and to get
out of non-core segments. Ameren is now planning to pull out of power
generation business. It has cited stringent environmental regulations as the
main cause behind the decision. Ameren also alluded to soft power prices as
the other possible reason. This decision has created uncertainty about the
company's future. However, if executed properly, it may help in ensuring the
company's viability in the long-run. Ameren did not provide any details about
its divestment process. Despite such drastic actions, the company is on its
way to provide good returns to its investors.
Exelon Slashes Dividend
Exelon Corporation boasts an excellent dividend yield of 6.84 percent.
However, the dividend has been now severely reduced to 31 cents per share,
with effect from Q2. Despite the cut, the dividend yield is still attractive.
While its stock saw a deep decline in 2012, it is showing signs of recovery
this year. While the dividend cut may dissuade some investors, it will relieve
the burden on the company's free cash flows and will have positive outcome in
the future. Download the free research on Exelon Corporation by signing up now
Exelon management is focused on growth through capital investment and spent
$5.8 billion in CAPEX during 2012. Like its dividend cut decision, high
capital expenditures may seem negative in the short-run, but are likely to be
accretive to its stock price in the long-run.
Exelon is mainly invested in power generation through nuclear processes and as
such did not benefit from the drop in natural gas and coal prices. Its other
malady is related to its weak margins. The company currently sports
operational margin of 11 percent while its peers sports operating margins in
the range of 15 percent to 22 percent. The stock has made good progress this
year and may continue to have mild upside in the near future. However, its
long-term prospects look better.
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