Ameren Corp. has a market cap of $6.48 billion; its shares were traded at around $27.2 with a P/E ratio of 10.23 and P/S ratio of 0.91. The dividend yield of Ameren Corp. stocks is 5.66%. Ameren Corp. had an annual average earning growth of 1.6% over the past 5 years.AEE is in the portfolios of David Dreman of Dreman Value Management, John Hussman of Hussman Economtrics Advisors, Inc., Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations: In May 2010, the MoPSC issued its order for UEs retail electric rate increase request. The MoPSC authorized a $230 million increase in rates effective June 21, 2010. UE was able to settle many of the issues in the case. However, several key issues were decided by the MoPSC after hearings, including return on equity, the FAC, UEs reliability tracking mechanisms and depreciation. While UE was disappointed with the 10.1% authorized return on equity, UE believes the overall order was fair. In a 2007 rate case settlement, UE agreed not to file a new natural gas delivery rate case before March 2010. As a result, UEs natural gas business is currently earning significantly less than its allowed return on investment. Therefore, in June 2010, UE filed a request with the MoPSC to increase its annual revenues for gas delivery service by $12 million, and new rates are expected to be effective in May 2011. Further, UE plans to file a retail electric case by the end of September 2010. The primary driver of this electric rate filing is the need to begin recovering UEs projected $600 million investment in the nearly complete Sioux plant scrubbers. This environmental control equipment is key to UEs ability to meet increasingly strict air emissions standards, including the CATR recently proposed by the EPA.
Ameren has identified more than $3 billion of transmission investment opportunities in Illinois and Missouri over the next 10 to 15 years, and Ameren is working aggressively, but prudently, to pursue these opportunities. Customers should benefit from improved reliability and a more efficient regional electric system. Amerens investors should benefit because Ameren expects to be able to earn attractive returns on investment. On August 2, 2010, Ameren announced the formation of a new subsidiary, the Ameren Transmission Company, which is dedicated to building regional greenfield electric transmission infrastructure under FERC regulation. Investments by the Ameren Transmission Company will be contingent upon pre-approval of supportive rate treatment of the projects by FERC. In addition, the projects would need to be approved by MISO. The Ameren Transmission Company expects to seek appropriate state approvals for the projects as well. The Ameren Transmission Companys initial investments are expected to be the Grand Rivers projects, the first of which involves building a 345 KV line across the state of Illinois, from the Missouri border to the Indiana border. The investment could total more than $1.3 billion through 2021 with a potential investment of up to $125 million over the 2011 to 2014 period.
Net income attributable to Ameren Corporation decreased to $152 million, or 64 cents per share, in the second quarter of 2010, from $165 million, or 77 cents per share, in the second quarter of 2009. Net income attributable to Ameren Corporation in the second quarter of 2010 decreased in the Merchant Generation segment by $77 million from the prior-year period, while net income attributable to Ameren Corporation in the Illinois Regulated and Missouri Regulated segments increased by $31 million and $31 million, respectively, from the same period in 2009.
Net income attributable to Ameren Corporation decreased to $254 million, or $1.07 per share, in the first six months of 2010 from $306 million, or $1.43 per share, in the first six months of 2009. Net income attributable to Ameren Corporation decreased in the Merchant Generation segment by $126 million in the first six months of 2010 compared to the prior-year period, while net income attributable to Ameren Corporation in the Illinois Regulated and Missouri Regulated segments increased by $39 million and $37 million, respectively, from the same period in 2009.
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