Reviewing Ameren Corporation (AEE) and PPL Corporation (PPL)
PPL Corporation (NYSE: PPL) and Ameren Corporation (NYSE:AEE) are both large-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.
Risk and Volatility
PPL Corporation has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Ameren Corporation has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for PPL Corporation and Ameren Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PPL Corporation currently has a consensus price target of $38.36, suggesting a potential downside of 3.02%. Ameren Corporation has a consensus price target of $55.33, suggesting a potential downside of 7.92%. Given PPL Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe PPL Corporation is more favorable than Ameren Corporation.
PPL Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.0%. Ameren Corporation pays an annual dividend of $1.76 per share and has a dividend yield of 2.9%. PPL Corporation pays out 66.1% of its earnings in the form of a dividend. Ameren Corporation pays out 61.5% 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. PPL Corporation has raised its dividend for 3 consecutive years and Ameren Corporation has raised its dividend for 5 consecutive years.
Insider & Institutional Ownership
71.0% of PPL Corporation shares are owned by institutional investors. Comparatively, 69.8% of Ameren Corporation shares are owned by institutional investors. 0.4% of PPL Corporation shares are owned by company insiders. Comparatively, 0.4% of Ameren Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares PPL Corporation and Ameren Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PPL Corporation||$7.40 billion||3.67||$4.04 billion||$2.39||16.55|
|Ameren Corporation||$6.06 billion||2.41||$2.44 billion||$2.86||21.01|
PPL Corporation has higher revenue and earnings than Ameren Corporation. PPL Corporation is trading at a lower price-to-earnings ratio than Ameren Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares PPL Corporation and Ameren Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
PPL Corporation beats Ameren Corporation on 13 of the 17 factors compared between the two stocks.
PPL Corporation Company Profile
PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).
Ameren Corporation Company Profile
Ameren Corporation is a utility holding company. The Company’s subsidiaries include Ameren Missouri, Ameren Illinois and Ameren Transmission Company (ATXI). It operates through four segments. The Ameren Missouri segment includes all of the operations of Ameren Missouri. The Ameren Illinois Electric Distribution segment consists of the electric distribution business of Ameren Illinois. The Ameren Illinois Natural Gas segment consists of the natural gas business of Ameren Illinois. The ATXI segment consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI. Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri. Ameren Illinois operates rate-regulated electric distribution, electric transmission and natural gas distribution businesses in Illinois. ATXI operates a Federal Energy Regulatory Commission rate-regulated electric transmission business.
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