Constellation Energy vs. Ameren: Which Power Stock Has More Upside?

Industry Overview - The demand for clean electricity is increasing due to factors such as AI-powered data centers, urbanization, industrial growth, rising global temperatures, and the popularity of electric vehicles [1] - Nuclear power plants require less land compared to other clean energy sources and have systematic waste management [1] Nuclear Power Advantages - Nuclear power plants have a high capacity factor, providing carbon-free electricity and continuous power supply even in extreme weather [2] - Production tax credits make nuclear energy more competitive by offsetting high construction costs [2] Company Analysis: Constellation Energy Corporation (CEG) - CEG is leveraging its nuclear fleet to meet the growing demand for clean energy, with a capacity factor of 94.8% in Q2 2025 [4] - The company generates 10% of the nation's carbon-free energy, with a total capacity of over 32,400 MW, powering more than 16 million homes and businesses [5] Company Analysis: Ameren Corporation (AEE) - AEE focuses on cleaner energy sources, with its Callaway Energy Center producing 24% of its electricity, sufficient for approximately 780,000 households [6] - The company plans to add 1,500 MW of nuclear generation by 2040 and is investing in advanced energy technologies [7] Financial Performance and Estimates - The Zacks Consensus Estimate for CEG's EPS has declined by 0.84% for 2025 but increased by 0.51% for 2026 [8] - AEE's EPS estimate has increased by 0.20% for 2025, indicating stronger growth potential [10] Capital Expenditures - CEG expects capital expenditures of nearly $3 billion and $3.5 billion for 2025 and 2026, respectively, with 35% allocated to nuclear fuel acquisition [11] - AEE plans to spend up to $26.3 billion from 2025 to 2029, with a projected pipeline of over $63 billion in regulated infrastructure investments from 2025 to 2034 [12] Return on Equity (ROE) and Dividend Yield - CEG's current ROE is 21.61%, significantly higher than AEE's 10.38% [14] - AEE offers a dividend yield of 2.82%, compared to CEG's 0.48% [15] Price Performance - Over the past three months, CEG shares have risen by 1.9%, while AEE shares have increased by 5.7% [16] Investment Recommendation - AEE is currently favored due to better price performance, earnings growth for 2025, and higher dividend yield, despite both companies having a Zacks Rank 3 (Hold) [18]