AES Corporation (AES) Stock Has Much To Attract Long-Term Investors

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The AES Corporation (AES), once a volatile utility firm, has been raising its share of renewable energy in recent years and could now be an attractive destination for long-term investment.


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Previously, AES Corporation was a foreign energy operator in developing countries and constructed power plants. Fluctuations in fossil fuel prices and exchange rates have not made it possible for AES to maintain stable sales and profit growth.

But AES updated its strategy a couple of years ago and chose a more stable business model. The abandonment of fossil fuels, the reliance on renewable energy and the sale of electricity under long-term contracts are part of the company’s that previously shared strategy.

The third quarter 2020 report reveals that this policy has been successfully implemented as the organization had a total of 25 GW of renewable energy generation facilities in various regions of the world. This, also on the scale of a pioneer in the green energy industry such as NextEra Energy Inc. ( NEE), is a lot of strength.

Larger consumers are more likely to purchase renewable energy, as for decades it has had a steady cost. Moreover the large share of renewable energy in the AES portfolio is attracting the interest of large funds who no longer want to invest in fossil energy.

AES expects adjusted earnings of about $1.42 per share in 2020, which is approximately 4% higher than in 2019. In some important markets for AES, such as Argentina, profit growth is expected, even against the backdrop of currency devaluation.

However, stock of the AES Corporation (AES) was down -0.80 percent on Wednesday to close the session at $ 20.98. The market capitalization amounted to 14.27 billion dollars. Performance over the past six months is an impressive rise of nearly 68 percent while stock price is up 5.43 percent since start of the year.

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