Ameren (NYSE:AEE – Get Rating) and American Electric Power (NASDAQ:AEPPZ – Get Rating) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.
Valuation & Earnings
This table compares Ameren and American Electric Power’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ameren | $7.96 billion | 2.76 | $1.07 billion | $4.17 | 20.05 |
| American Electric Power | $19.74 billion | N/A | N/A | N/A | N/A |
Ameren has higher earnings, but lower revenue than American Electric Power.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Ameren | 13.34% | 10.41% | 2.88% |
| American Electric Power | N/A | N/A | N/A |
Analyst Recommendations
This is a breakdown of current recommendations for Ameren and American Electric Power, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ameren | 0 | 5 | 4 | 0 | 2.44 |
| American Electric Power | 0 | 0 | 0 | 0 | N/A |
Ameren currently has a consensus target price of $94.22, indicating a potential upside of 12.72%. Given Ameren’s higher possible upside, analysts plainly believe Ameren is more favorable than American Electric Power.
Insider & Institutional Ownership
78.4% of Ameren shares are held by institutional investors. 0.4% of Ameren shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Ameren pays an annual dividend of $2.52 per share and has a dividend yield of 3.0%. American Electric Power pays an annual dividend of $3.06 per share and has a dividend yield of 6.2%. Ameren pays out 60.4% of its earnings in the form of a dividend. Ameren has raised its dividend for 10 consecutive years.
Summary
Ameren beats American Electric Power on 8 of the 11 factors compared between the two stocks.
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 and transmission businesses. 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 St. Louis, Missouri.
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, 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.
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