AMERICAN ELECTRIC POWER (AEP.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:AEP - US0255371017 - Common Stock
100.5 EUR
-1 (-0.99%)
AEP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 26 industry peers in the Electric Utilities industry. AEP has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, AEP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year AEP was profitable.
- In the past year AEP had a positive cash flow from operations.
- AEP had positive earnings in each of the past 5 years.
- Each year in the past 5 years AEP had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 3.32%, AEP is doing good in the industry, outperforming 61.54% of the companies in the same industry.
- AEP has a better Return On Equity (12.03%) than 61.54% of its industry peers.
- The Return On Invested Capital of AEP (3.68%) is worse than 65.38% of its industry peers.
- AEP had an Average Return On Invested Capital over the past 3 years of 3.17%. This is below the industry average of 6.56%.
- The 3 year average ROIC (3.17%) for AEP is below the current ROIC(3.68%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 12.03% | ||
| ROIC | 3.68% |
ROA(3y)2.54%
ROA(5y)2.64%
ROE(3y)9.79%
ROE(5y)10.22%
ROIC(3y)3.17%
ROIC(5y)3.09%
1.3 Margins
- The Profit Margin of AEP (17.23%) is better than 84.62% of its industry peers.
- AEP's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 24.93%, AEP is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
- In the last couple of years the Operating Margin of AEP has grown nicely.
- AEP has a Gross Margin of 68.45%. This is in the better half of the industry: AEP outperforms 69.23% of its industry peers.
- In the last couple of years the Gross Margin of AEP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.93% | ||
| PM (TTM) | 17.23% | ||
| GM | 68.45% |
OM growth 3Y3.41%
OM growth 5Y5.01%
PM growth 3Y0.51%
PM growth 5Y4.04%
GM growth 3Y1.2%
GM growth 5Y-2.58%
2. Health
2.1 Basic Checks
- AEP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, AEP has more shares outstanding
- AEP has more shares outstanding than it did 5 years ago.
- AEP has a better debt/assets ratio than last year.
2.2 Solvency
- AEP has an Altman-Z score of 0.98. This is a bad value and indicates that AEP is not financially healthy and even has some risk of bankruptcy.
- AEP's Altman-Z score of 0.98 is on the low side compared to the rest of the industry. AEP is outperformed by 65.38% of its industry peers.
- AEP has a Debt/Equity ratio of 1.49. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of AEP (1.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.98 |
ROIC/WACC0.59
WACC6.2%
2.3 Liquidity
- A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
- AEP has a Current ratio of 0.69. This is amonst the worse of the industry: AEP underperforms 88.46% of its industry peers.
- A Quick Ratio of 0.53 indicates that AEP may have some problems paying its short term obligations.
- With a Quick ratio value of 0.53, AEP is not doing good in the industry: 84.62% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.32% over the past year.
- The Earnings Per Share has been growing slightly by 5.71% on average over the past years.
- The Revenue has grown by 8.44% in the past year. This is quite good.
- The Revenue has been growing slightly by 4.85% on average over the past years.
EPS 1Y (TTM)7.32%
EPS 3Y5.78%
EPS 5Y5.71%
EPS Q2Q%-2.7%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%10.89%
3.2 Future
- The Earnings Per Share is expected to grow by 8.09% on average over the next years. This is quite good.
- AEP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.46% yearly.
EPS Next Y6.51%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
EPS Next 5Y8.09%
Revenue Next Year5.55%
Revenue Next 2Y6.58%
Revenue Next 3Y6.41%
Revenue Next 5Y7.46%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 19.59 indicates a rather expensive valuation of AEP.
- The rest of the industry has a similar Price/Earnings ratio as AEP.
- When comparing the Price/Earnings ratio of AEP to the average of the S&P500 Index (27.21), we can say AEP is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 18.42, AEP is valued on the expensive side.
- AEP's Price/Forward Earnings ratio is in line with the industry average.
- AEP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.59 | ||
| Fwd PE | 18.42 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AEP is valued a bit more expensive than the industry average as 61.54% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.21 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of AEP may justify a higher PE ratio.
PEG (NY)3.01
PEG (5Y)3.43
EPS Next 2Y6.69%
EPS Next 3Y7.04%
5. Dividend
5.1 Amount
- AEP has a Yearly Dividend Yield of 3.18%.
- AEP's Dividend Yield is comparable with the industry average which is at 3.03.
- AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
5.2 History
- The dividend of AEP has a limited annual growth rate of 5.62%.
Dividend Growth(5Y)5.62%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
- 54.46% of the earnings are spent on dividend by AEP. This is a bit on the high side, but may be sustainable.
- The dividend of AEP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP54.46%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
AMERICAN ELECTRIC POWER / AEP.DE FAQ
Can you provide the ChartMill fundamental rating for AMERICAN ELECTRIC POWER?
ChartMill assigns a fundamental rating of 4 / 10 to AEP.DE.
Can you provide the valuation status for AMERICAN ELECTRIC POWER?
ChartMill assigns a valuation rating of 2 / 10 to AMERICAN ELECTRIC POWER (AEP.DE). This can be considered as Overvalued.
Can you provide the profitability details for AMERICAN ELECTRIC POWER?
AMERICAN ELECTRIC POWER (AEP.DE) has a profitability rating of 7 / 10.
What is the financial health of AMERICAN ELECTRIC POWER (AEP.DE) stock?
The financial health rating of AMERICAN ELECTRIC POWER (AEP.DE) is 1 / 10.
What is the earnings growth outlook for AMERICAN ELECTRIC POWER?
The Earnings per Share (EPS) of AMERICAN ELECTRIC POWER (AEP.DE) is expected to grow by 6.51% in the next year.