Ameren Corporation increases quarterly cash dividend by 6.3 percent, marking eleven consecutive years of growth

Rhea-AI Summary

Ameren Corporation (NYSE: AEE) increases its quarterly cash dividend by 6.3% to 67 cents per share, resulting in an annualized equivalent rate of $2.68 per share. The company's sustainable growth strategy and confidence in future investments are highlighted, with a focus on modernizing the grid and transitioning to cleaner energy sources.

Financial Analyst

The announcement by Ameren Corporation of a 6.3% increase in its quarterly cash dividend is a significant indicator of the company's financial health and its commitment to shareholder value. This move, marking the eleventh consecutive year of dividend growth, signals confidence from the management in the company's sustainable long-term growth strategy. The increase aligns with the company's earnings-per-share growth expectations and is within the targeted payout ratio range of 55% to 65%, which is a conventional range for many utilities aiming to balance reinvestment in operations with shareholder returns.

Investors typically view dividend increases as a positive sign, as they suggest that a company is generating enough cash flow to share profits with shareholders while still funding its operations and growth initiatives. For Ameren, this could translate into a more attractive investment profile, potentially leading to an uptick in stock demand. However, it is also essential for investors to consider the underlying factors driving this growth, such as the company's investment in modernizing the grid and transitioning to cleaner energy, which could entail significant capital expenditures and affect future financial flexibility.

Energy Sector Analyst

From an industry perspective, Ameren's focus on modernizing the grid and transitioning to a cleaner energy future is in line with broader energy sector trends. The emphasis on upgrading infrastructure and investing in renewable energy sources is critical given the global push for sustainability and reduced carbon emissions. Ameren's strategy may also be seen as a response to regulatory pressures and market demands for cleaner energy, which are increasingly influencing utility companies' operations and investment decisions.

However, these transitions come with their own set of challenges, including the need for substantial capital, potential regulatory hurdles and technological risks. The ability of Ameren to manage these factors effectively will be crucial in determining whether the company can maintain its dividend growth trajectory and meet its long-term earnings-per-share growth expectations. Stakeholders should monitor the company's progress in executing its investment strategy and the impact on its operational and financial performance.

Market Research Analyst

Examining Ameren's dividend increase from a market research standpoint, it's important to note that dividend-paying stocks are often favored in volatile market conditions for the perceived stability and consistent returns they offer. In the context of Ameren's consistent dividend growth, the company may attract income-focused investors, particularly those seeking lower risk in the utilities sector, which is traditionally seen as a defensive play.

The company's commitment to increasing shareholder value through dividends, coupled with its strategic investments in infrastructure and clean energy, could position it favorably against competitors. However, it's worth considering the scalability of these investments and whether they will continue to support dividend growth without compromising the company's financial health. A balance between maintaining a competitive dividend yield and ensuring the affordability of these dividends in the long term is essential for sustaining investor confidence.

New annualized rate is $2.68 per share

ST. LOUIS, Feb. 9, 2024 /PRNewswire/ -- The board of directors of Ameren Corporation (NYSE: AEE) today declared a quarterly cash dividend on its common stock of 67 cents per share, a 6.3% increase from the prior quarterly cash dividend of 63 cents per share, resulting in an annualized equivalent dividend rate of $2.68 per share. The previous annualized equivalent dividend rate was $2.52 per share.

"We are pleased to announce this is the eleventh consecutive year we've increased our dividend," said Martin J. Lyons, Jr., chairman, president and chief executive officer of Ameren Corporation. "Today's increase affirms the Ameren Board of Directors' confidence in our sustainable long-term growth strategy, which includes a robust pipeline of future investments that will continue to modernize the grid, enable our transition to a cleaner energy future, drive increasing value for our customers, support job creation and economic development and provide strong returns for our shareholders."

Lyons said Ameren anticipates dividend growth will be in line with the company's long-term earnings-per-share growth expectations and within a payout ratio range of 55% to 65%. Future earnings growth opportunities will be driven by cash flow, investments and other business considerations.

The common share dividend is payable March 29, 2024, to shareholders of record at the close of business on March 13, 2024.

Separately, the board of directors of Union Electric Company, doing business as Ameren Missouri, declared regular quarterly cash dividends on all classes of Union Electric Company's preferred stock. These preferred stock dividends are payable May 15, 2024, to shareholders of record at the close of business on April 19, 2024.

In addition, the board of directors of Ameren Illinois Company declared regular quarterly cash dividends on all classes of Ameren Illinois Company's preferred stock. These preferred stock dividends are payable May 1, 2024, to shareholders of record at the close of business on April 15, 2024.

About Ameren Corporation
St. Louis-based Ameren Corporation powers the quality of life for 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area through its Ameren Missouri and Ameren Illinois rate-regulated utility subsidiaries. Ameren Illinois provides electric transmission and distribution service and natural gas distribution service. Ameren Missouri provides electric generation, transmission and distribution services, as well as natural gas distribution service. Ameren Transmission Company of Illinois develops, owns and operates a rate-regulated electric transmission business in the Midcontinent Independent System Operator, Inc. For more information, visit Ameren.com, or follow us at @AmerenCorp, Facebook.com/AmerenCorp, or LinkedIn.com/company/Ameren.

Forward-looking Statements
Statements in this release not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. In addition to factors discussed in this release, Ameren's Annual Report on Form 10-K for the year ended Dec. 31, 2022, and its other reports filed with the Securities and Exchange Commission contain a list of factors and a discussion of risks which could cause actual results to differ materially from management expectations suggested in such "forward-looking" statements. All "forward-looking" statements included in this release are based upon information presently available, and Ameren, except to the extent required by the federal securities laws, undertakes no obligation to update or revise publicly any "forward-looking" statements to reflect new information or current events.

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SOURCE Ameren Corporation

What is the new quarterly cash dividend per share for Ameren Corporation (NYSE: AEE)?

The new quarterly cash dividend for Ameren Corporation (NYSE: AEE) is 67 cents per share.

How does the new quarterly cash dividend compare to the previous dividend for Ameren Corporation (NYSE: AEE)?

The new quarterly cash dividend of 67 cents per share represents a 6.3% increase from the previous dividend of 63 cents per share.

What is the annualized equivalent dividend rate per share for Ameren Corporation (NYSE: AEE) after the increase?

The annualized equivalent dividend rate per share for Ameren Corporation (NYSE: AEE) after the increase is $2.68.

When will the common share dividend be payable for Ameren Corporation (NYSE: AEE)?

The common share dividend for Ameren Corporation (NYSE: AEE) will be payable on March 29, 2024.

What is the payout ratio range expected by Ameren Corporation (NYSE: AEE) for dividend growth?

Ameren Corporation (NYSE: AEE) expects dividend growth to be within a payout ratio range of 55% to 65%.