StockCall Scrutinizes Exelon and Ameren: Diversified Power Companies Diversify their Business
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 http://www.stockcall.com/signup
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 20th. 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 at http://www.StockCall.com/EXC021513.pdf
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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