Entergy Corporation and Ameren Corporation are two leading players in the regulated electric utility industry, each serving distinct yet overlapping U.S. markets with diverse energy portfolios. Both companies emphasize innovation through a mix of traditional and renewable energy sources, positioning themselves strategically for the evolving energy landscape. This article will analyze their strengths and risks to help you decide which company offers the most compelling investment opportunity today.
Table of contents
Companies Overview
I will begin the comparison between Entergy Corporation and Ameren Corporation by providing an overview of these two companies and their main differences.
Entergy Corporation Overview
Entergy Corporation is a US-based utility company engaged in the production and retail distribution of electricity. It operates primarily in Arkansas, Louisiana, Mississippi, and Texas, serving 3M utility customers. Entergy generates electricity through gas, nuclear, coal, hydro, and solar sources, with a capacity of about 26,000 MW including 6,000 MW of nuclear power. Founded in 1913, it remains a significant player in the regulated electric industry.
Ameren Corporation Overview
Ameren Corporation is a public utility holding company headquartered in St. Louis, Missouri, with operations across Missouri and Illinois. It operates four segments focusing on electric and natural gas generation, transmission, and distribution. Ameren uses coal, nuclear, natural gas, and renewable sources like hydroelectric, wind, methane gas, and solar for electricity generation. Founded in 1881, Ameren serves residential, commercial, and industrial customers within regulated markets.
Key similarities and differences
Both Entergy and Ameren operate in the regulated electric industry in the US, focusing on electricity generation and distribution with diversified energy sources including nuclear and renewables. Entergy’s operational footprint spans four Southern states serving 3M customers, while Ameren focuses on Missouri and Illinois with a broader mix of electric and natural gas services. Entergy’s generation capacity is larger, with a strong emphasis on nuclear power, whereas Ameren combines electric and natural gas utilities across multiple segments.
Income Statement Comparison
The table below presents a side-by-side comparison of the key income statement metrics for Entergy Corporation and Ameren Corporation for the fiscal year 2024.
| Metric | Entergy Corporation | Ameren Corporation |
|---|---|---|
| Market Cap | 41.8B | 27.0B |
| Revenue | 11.9B | 7.6B |
| EBITDA | 5.0B | 3.5B |
| EBIT | 2.6B | 1.9B |
| Net Income | 1.1B | 1.2B |
| EPS | 2.47 | 4.43 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Entergy Corporation
Entergy’s revenue showed a 17.5% growth from 2020 to 2024 but declined 2.2% in the latest year. Net income decreased overall by 24.6%, with a steep 54.1% drop in net margin in 2024. Margins remain favorable, with a 48.3% gross margin and 21.8% EBIT margin in 2024, yet recent margin declines and EPS fell by 55.9%, indicating profit pressure.
Ameren Corporation
Ameren experienced 31.6% revenue growth from 2020 to 2024, with a slight 1.6% rise in 2024. Net income increased 35.7% overall, showing stability with a 15.5% net margin in 2024. EBIT margin stands at 25.4%, and EPS grew modestly by 0.9%. Margins and profitability remain favorable, with steady improvement in key metrics over the period.
Which one has the stronger fundamentals?
Ameren presents stronger fundamentals with consistent revenue and net income growth, favorable margins, and stable EPS expansion. Entergy, while maintaining good margins, faces unfavorable declines in net income, margins, and earnings in the latest year. Ameren’s income statement exhibits a more balanced and positive trend compared to Entergy’s recent performance challenges.
Financial Ratios Comparison
The table below presents the key financial ratios for Entergy Corporation (ETR) and Ameren Corporation (AEE) for the fiscal year 2024, enabling a side-by-side assessment of their recent financial performance.
| Ratios | Entergy Corporation (ETR) | Ameren Corporation (AEE) |
|---|---|---|
| ROE | 7.02% | 9.76% |
| ROIC | 3.20% | 3.32% |
| P/E | 30.56 | 20.12 |
| P/B | 2.14 | 1.96 |
| Current Ratio | 0.72 | 0.66 |
| Quick Ratio | 0.43 | 0.44 |
| D/E | 1.91 | 1.55 |
| Debt-to-Assets | 44.63% | 41.98% |
| Interest Coverage | 2.30 | 2.29 |
| Asset Turnover | 0.18 | 0.17 |
| Fixed Asset Turnover | 0.25 | 0.21 |
| Payout ratio | 94.23% | 60.41% |
| Dividend yield | 3.08% | 3.00% |
Interpretation of the Ratios
Entergy Corporation
Entergy shows a mixed ratio profile with unfavorable returns on equity and invested capital, alongside a low current and quick ratio, signaling liquidity concerns. The dividend yield is favorable at 3.08%, but the high payout relative to free cash flow and elevated debt levels pose sustainability risks. Shareholder returns rely partly on dividends amid cautious cash flow coverage.
Ameren Corporation
Ameren presents stronger profitability with a favorable net margin of 15.51%, though return on equity remains unfavorable at 9.76%. Liquidity ratios are weak, and debt levels are moderately high but neutral in asset coverage. The company offers a stable 3.0% dividend yield supported by consistent payout policies, reflecting moderate risk in shareholder distributions.
Which one has the best ratios?
Ameren edges out Entergy with a higher net margin and a more balanced debt profile, though both face unfavorable returns and liquidity challenges. Entergy’s higher dividend yield contrasts with its weaker cash flow coverage, while Ameren’s ratios suggest slightly better overall financial health but still warrant caution due to persistent unfavorable metrics.
Strategic Positioning
This section compares the strategic positioning of Entergy Corporation and Ameren Corporation, including Market position, Key segments, and exposure to technological disruption:
Entergy Corporation
- Operates in regulated electric markets with moderate beta; faces competitive pressure from wholesale and retail sectors.
- Key segments: Utility (electric power and natural gas distribution) and Wholesale Commodities including nuclear and non-nuclear plants.
- Generates electricity through gas, nuclear, coal, hydro, and solar; faces industry disruption from renewables and regulatory changes.
Ameren Corporation
- Operates as a public utility holding company with a low beta, facing regulated market competition.
- Key segments: Ameren Missouri, Illinois Electric Distribution, Illinois Natural Gas, and Transmission; diversified energy sources.
- Uses coal, nuclear, natural gas, hydroelectric, wind, methane gas, and solar; exposed to renewable energy transition.
Entergy Corporation vs Ameren Corporation Positioning
Entergy shows a dual-segment structure combining retail utility and wholesale power commodities, while Ameren operates through multiple regional regulated segments. Entergy’s diversified generation contrasts with Ameren’s regional focus, reflecting differing business drivers and operational scopes.
Which has the best competitive advantage?
Both companies exhibit a very unfavorable moat status with declining ROIC trends, indicating value destruction and decreasing profitability. Neither demonstrates a sustainable competitive advantage based on their recent return on invested capital relative to cost of capital.
Stock Comparison
The stock price movements of Entergy Corporation (ETR) and Ameren Corporation (AEE) over the past 12 months reveal strong bullish trends with notable deceleration phases and recent downward pressure in trading dynamics.
Trend Analysis
Entergy Corporation’s stock showed a strong bullish trend over the past 12 months with an 86.74% price increase, though momentum has decelerated. Recent weeks reveal a slight bearish correction of -3.17%.
Ameren Corporation’s stock also experienced a bullish trend with a 43.73% gain over the year, accompanied by deceleration. Its recent trend is bearish with a -4.19% decline, showing more pronounced short-term weakness.
Comparing both, Entergy delivered the highest market performance with a significantly larger annual gain despite both stocks facing recent downward adjustments.
Target Prices
Analysts present a cautiously optimistic target consensus for Entergy Corporation and Ameren Corporation.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Entergy Corporation | 115 | 91 | 103.17 |
| Ameren Corporation | 119 | 103 | 111.86 |
For Entergy, the consensus target of 103.17 is notably above the current price of 93.52, suggesting moderate upside potential. Ameren’s target consensus at 111.86 exceeds its current 99.91 price, indicating analysts expect further gains.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Entergy Corporation and Ameren Corporation:
Rating Comparison
ETR Rating
- Rating: B-, classified as Very Favorable by analysts.
- Discounted Cash Flow Score: 1, indicating a Very Unfavorable valuation outlook.
- ROE Score: 4, considered Favorable for efficient profit generation.
- ROA Score: 3, showing Moderate asset utilization effectiveness.
- Debt To Equity Score: 2, reflecting Moderate financial risk.
- Overall Score: 2, a Moderate overall financial standing assessment.
AEE Rating
- Rating: B-, classified as Very Favorable by analysts.
- Discounted Cash Flow Score: 1, indicating a Very Unfavorable valuation outlook.
- ROE Score: 4, considered Favorable for efficient profit generation.
- ROA Score: 3, showing Moderate asset utilization effectiveness.
- Debt To Equity Score: 2, reflecting Moderate financial risk.
- Overall Score: 2, a Moderate overall financial standing assessment.
Which one is the best rated?
Both Entergy and Ameren share identical ratings and financial scores across all measured metrics. Neither company is rated better than the other based on the available data.
Scores Comparison
The comparison of Entergy Corporation and Ameren Corporation scores is as follows:
ETR Scores
- Altman Z-Score: 1.04, in distress zone, indicating a high bankruptcy risk.
- Piotroski Score: 4, rated as average financial strength.
AEE Scores
- Altman Z-Score: 0.97, in distress zone, indicating a high bankruptcy risk.
- Piotroski Score: 6, rated as average financial strength.
Which company has the best scores?
Based solely on these scores, Ameren has a slightly lower Altman Z-Score but a higher Piotroski Score compared to Entergy. Ameren’s financial strength appears somewhat stronger, while both face high bankruptcy risk.
Grades Comparison
Here is a detailed comparison of the latest grades assigned to Entergy Corporation and Ameren Corporation by reputable grading firms:
Entergy Corporation Grades
This table summarizes Entergy Corporation’s recent grades from established grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Argus Research | Maintain | Buy | 2026-01-06 |
| UBS | Maintain | Buy | 2025-12-17 |
| Keybanc | Maintain | Overweight | 2025-12-12 |
| JP Morgan | Maintain | Overweight | 2025-12-11 |
| Citigroup | Maintain | Neutral | 2025-11-18 |
| Evercore ISI Group | Maintain | In Line | 2025-10-30 |
| Mizuho | Maintain | Outperform | 2025-10-27 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-22 |
| B of A Securities | Maintain | Neutral | 2025-10-16 |
| Keybanc | Maintain | Overweight | 2025-10-15 |
Entergy’s grades predominantly reflect positive or neutral stances, with multiple “Buy” and “Overweight” ratings indicating confidence in the stock’s prospects.
Ameren Corporation Grades
This table presents Ameren Corporation’s recent grades from reputable grading firms.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Buy | 2025-12-17 |
| Keybanc | Downgrade | Sector Weight | 2025-12-12 |
| Mizuho | Maintain | Outperform | 2025-10-27 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-22 |
| Barclays | Maintain | Equal Weight | 2025-10-21 |
| Keybanc | Maintain | Overweight | 2025-10-15 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-25 |
| Keybanc | Maintain | Overweight | 2025-07-16 |
| UBS | Maintain | Buy | 2025-07-11 |
| Barclays | Maintain | Equal Weight | 2025-07-10 |
Ameren’s ratings are mixed, with several “Equal Weight” and “Sector Weight” grades, alongside some “Buy” and “Outperform” ratings, indicating a more cautious outlook.
Which company has the best grades?
Entergy Corporation has received predominantly positive grades such as multiple “Buy” and “Overweight” ratings, while Ameren Corporation shows a more balanced mix of “Buy,” “Equal Weight,” and a recent downgrade. This suggests Entergy currently enjoys stronger analyst sentiment, which may influence investor confidence and portfolio considerations accordingly.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Entergy Corporation (ETR) and Ameren Corporation (AEE) based on the most recent financial and operational data.
| Criterion | Entergy Corporation (ETR) | Ameren Corporation (AEE) |
|---|---|---|
| Diversification | Broad revenue streams from Commercial (2.95B), Industrial (3.20B), Residential (4.51B), and other electric segments; moderate exposure to natural gas (178M) | Focused primarily on Electricity (6.54B) and Natural Gas (1.08B); less diversified across segments |
| Profitability | Net margin 8.93% (neutral), ROIC 3.2% (unfavorable), declining profitability; company is shedding value | Net margin 15.51% (favorable), ROIC 3.32% (unfavorable), also shedding value but with stronger margin |
| Innovation | Limited data on innovation; below-average asset turnover (0.18) suggests efficiency challenges | Similarly low asset turnover (0.17); no clear innovation edge visible |
| Global presence | Primarily regional US utility operations, no significant global footprint | Also focused on US regional markets; no global presence |
| Market Share | Significant presence in regulated electricity and natural gas markets with steady revenues | Strong market share in electricity and natural gas distribution in Midwestern US |
Key takeaways: Both companies operate primarily in regulated US utility markets with solid market shares. Ameren shows better profitability margins, but both have declining returns on invested capital, indicating value destruction and operational challenges. Diversification favors Entergy, but profitability and efficiency metrics are currently unfavorable for both.
Risk Analysis
Below is a summary table of key risk factors for Entergy Corporation (ETR) and Ameren Corporation (AEE) based on the latest 2024 data:
| Metric | Entergy Corporation (ETR) | Ameren Corporation (AEE) |
|---|---|---|
| Market Risk | Moderate (Beta 0.648) | Moderate (Beta 0.592) |
| Debt level | High (Debt-to-Equity 1.91, Neutral rating) | Elevated (Debt-to-Equity 1.55, Neutral rating) |
| Regulatory Risk | Significant (Utility sector with nuclear assets) | Significant (Regulated utility with coal, nuclear, renewables) |
| Operational Risk | Medium (Complex asset base including nuclear) | Medium (Diverse generation mix) |
| Environmental Risk | Moderate (Nuclear and fossil fuels exposure) | Moderate (Coal, nuclear, renewables exposure) |
| Geopolitical Risk | Low to moderate (US-focused operations) | Low to moderate (US-focused operations) |
Both companies face notable regulatory and environmental risks due to their reliance on nuclear and fossil fuel generation, which are subject to evolving policies and environmental standards. Debt levels are relatively high for both but manageable given their stable utility cash flows. Market risk is moderate with betas below 1, indicating less volatility than the broader market. Entergy’s Altman Z-Score places it in distress zone, signaling higher financial risk, while Ameren also shows distress signs but slightly lower. The most impactful risks are regulatory changes and environmental constraints that could affect operational costs and future capital expenditures.
Which Stock to Choose?
Entergy Corporation (ETR) shows a mixed income evolution with a 17.46% revenue growth over 2020-2024 but declining net income and EPS. Its financial ratios are largely unfavorable, with low returns on equity and invested capital, and a high debt-to-equity ratio. The company’s rating is very favorable overall, but it faces a very unfavorable moat due to declining ROIC below WACC.
Ameren Corporation (AEE) demonstrates more consistent income growth with 31.57% revenue and 35.71% net income increases over the same period. Its financial ratios are slightly more favorable, highlighted by a stronger net margin and better dividend yield, though some ratios remain unfavorable. The company shares a very favorable rating with ETR but also suffers a very unfavorable moat from declining ROIC below WACC.
Considering ratings and income evaluations, AEE may appear to offer a more favorable income trend and slightly better financial ratios, while ETR’s higher market cap contrasts with its less favorable profitability metrics. Risk-tolerant investors seeking growth might see potential in AEE’s income trajectory, whereas more cautious profiles could interpret ETR’s stable rating as a sign of resilience despite weaker profitability.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Entergy Corporation and Ameren Corporation to enhance your investment decisions:
