Duke Energy (DUK) vs. Ameren (AEE) Head-To-Head Survey

Ameren (NYSE: AEE) and Duke Energy (NYSE:DUK) are both large-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Dividends

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Ameren pays an annual dividend of $1.83 per share and has a dividend yield of 3.3%. Duke Energy pays an annual dividend of $3.56 per share and has a dividend yield of 4.6%. Ameren pays out 64.7% of its earnings in the form of a dividend. Duke Energy pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren has increased its dividend for 4 consecutive years and Duke Energy has increased its dividend for 11 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Ameren has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500.

Valuation and Earnings

This table compares Ameren and Duke Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ameren $6.18 billion 2.18 $523.00 million $2.83 19.61
Duke Energy $23.57 billion 2.28 $3.06 billion $4.57 16.78

Duke Energy has higher revenue and earnings than Ameren. Duke Energy is trading at a lower price-to-earnings ratio than Ameren, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

69.8% of Ameren shares are owned by institutional investors. Comparatively, 57.0% of Duke Energy shares are owned by institutional investors. 0.4% of Ameren shares are owned by insiders. Comparatively, 0.1% of Duke Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Ameren and Duke Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ameren 8.47% 9.43% 2.72%
Duke Energy 12.95% 7.72% 2.36%

Analyst Ratings

This is a breakdown of current ratings for Ameren and Duke Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameren 2 3 2 0 2.00
Duke Energy 3 8 5 0 2.13

Ameren currently has a consensus price target of $58.83, indicating a potential upside of 5.99%. Duke Energy has a consensus price target of $84.07, indicating a potential upside of 9.65%. Given Duke Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Duke Energy is more favorable than Ameren.

Summary

Duke Energy beats Ameren on 10 of the 17 factors compared between the two stocks.

Ameren 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.

Duke Energy Company Profile

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through three segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure, and Commercial Renewables. The Electric Utilities and Infrastructure segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest; uses coal, hydroelectric, natural gas, oil, renewable sources, and nuclear fuel to generate electricity; and engages in the wholesale of electricity to municipalities, electric cooperative utilities, and other load-serving entities. This segment serves approximately 7.6 million retail electric customers in 6 states in the Southeast and Midwest regions of the United States covering a service territory of approximately 95,000 square miles; and owns approximately 49,506 megawatts (MW) of generation capacity. The Gas Utilities and Infrastructure segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and owns, operates, and invests in various pipeline transmission and natural gas storage facilities. It has approximately 1.5 million customers, including 1 million customers located in North Carolina, South Carolina, and Tennessee, as well as 526,000 customers located in southwestern Ohio and northern Kentucky. The Commercial Renewables segment acquires, builds, develops, and operates wind and solar renewable generation projects, including nonregulated renewable energy and energy storage services to utilities, electric cooperatives, municipalities, and commercial and industrial customers. This segment has 21 wind and 63 solar facilities with a capacity of 2,907 MW across 14 states. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2005. Duke Energy Corporation is headquartered in Charlotte, North Carolina.

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