Yahoo Finance How Does Ameren Corporation's (NYSE:AEE) Earnings Growth Stack Up Against Industry Performance?
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Understanding Ameren Corporation's (NYSE:AEE) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Ameren is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
See our latest analysis for Ameren
Were AEE's earnings stronger than its past performances and the industry?
AEE's trailing twelve-month earnings (from 31 March 2019) of US$855m has jumped 49% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.2%, indicating the rate at which AEE is growing has accelerated. What's enabled this growth? Let's take a look at if it is solely attributable to an industry uplift, or if Ameren has experienced some company-specific growth.
In terms of returns from investment, Ameren has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.4% is below the US Integrated Utilities industry of 4.5%, indicating Ameren's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Ameren’s debt level, has declined over the past 3 years from 6.0% to 5.8%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 99% to 120% over the past 5 years.
What does this mean?
Ameren's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Ameren gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Ameren to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for AEE’s future growth? Take a look at our free research report of analyst consensus for AEE’s outlook.
Financial Health: Are AEE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
