Will Natural Gas Overpower Exelon Corporation (EXC)’s Nuclear Power Business?

Another utility stock with a decent dividend yield of 4.4% is Ameren Corp (NYSE:AEE). The company is trying to move more into regulation, which will make it neutral toward fuel price wars, making its returns more stable. Further, the company’s success depends on how quickly it offloads its three gas centers and is able to move forward with the sale of its five coal-generated power plants to Dynegy Inc. (NYSE:DYN).

Currently, Ameren Corp (NYSE:AEE) is under a financial crunch with a heavy debt sitting on its balance sheet and a lot of regulatory pressures surround its plans of moving ahead with the sale of any of its plants. No doubt the company has some very strategic plans by moving toward regulation and offloading its merchant- generation fleet, but an air of uncertainty that surrounds Ameren Corp (NYSE:AEE) does not make it a very solid investment option.

Final words

Exelon Corporation (NYSE:EXC) is well equipped to derive benefits from the demand shifting toward clean sources of energy, but that is a thing of the future  — if it is cost efficient until then. If gas prices remain flat over time, Exelon might find it hard to even survive with negative earnings. At the moment, there are no reasons for me to be willing to put this utility stock in my portfolio.

The article Will Natural Gas Overpower Exelon’s Nuclear Power Business? originally appeared on Fool.com and is written by tarun bachhawat.

tarun bachhawat has no position in any stocks mentioned. The Motley Fool recommends Exelon. tarun is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited. tarun is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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