AMERICAN ELECTRIC POWER (AEP) Stock Fundamental Analysis
USA - NASDAQ:AEP - US0255371017 - Common Stock
116.39 USD
+0.41 (+0.35%)
Overall AEP gets a fundamental rating of 4 out of 10. We evaluated AEP against 47 industry peers in the Electric Utilities industry. AEP scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, AEP is valued expensive at the moment. AEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
AEP had positive earnings in the past year.
AEP had a positive operating cash flow in the past year.
In the past 5 years AEP has always been profitable.
AEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AEP has a Return On Assets of 3.39%. This is in the better half of the industry: AEP outperforms 72.34% of its industry peers.
With a decent Return On Equity value of 12.20%, AEP is doing good in the industry, outperforming 68.09% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.14%, AEP is in line with its industry, outperforming 51.06% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AEP is in line with the industry average of 4.90%.
The last Return On Invested Capital (4.14%) for AEP is above the 3 year average (3.55%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.39% | ||
| ROE | 12.2% | ||
| ROIC | 4.14% |
ROA(3y)2.54%
ROA(5y)2.64%
ROE(3y)9.79%
ROE(5y)10.22%
ROIC(3y)3.55%
ROIC(5y)3.47%
1.3 Margins
Looking at the Profit Margin, with a value of 17.66%, AEP belongs to the top of the industry, outperforming 89.36% of the companies in the same industry.
AEP's Profit Margin has improved in the last couple of years.
The Operating Margin of AEP (24.82%) is better than 68.09% of its industry peers.
In the last couple of years the Operating Margin of AEP has grown nicely.
AEP has a better Gross Margin (69.10%) than 61.70% of its industry peers.
AEP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.82% | ||
| PM (TTM) | 17.66% | ||
| GM | 69.1% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AEP is destroying value.
AEP has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AEP has more shares outstanding
AEP has a better debt/assets ratio than last year.
2.2 Solvency
AEP has an Altman-Z score of 0.96. 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 0.96 is in line compared to the rest of the industry. AEP outperforms 53.19% of its industry peers.
A Debt/Equity ratio of 1.43 is on the high side and indicates that AEP has dependencies on debt financing.
With a Debt to Equity ratio value of 1.43, AEP perfoms like the industry average, outperforming 48.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.43 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.65
WACC6.42%
2.3 Liquidity
A Current Ratio of 0.55 indicates that AEP may have some problems paying its short term obligations.
AEP has a worse Current ratio (0.55) than 85.11% of its industry peers.
AEP has a Quick Ratio of 0.55. This is a bad value and indicates that AEP is not financially healthy enough and could expect problems in meeting its short term obligations.
AEP has a worse Quick ratio (0.41) than 87.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.41 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.78% over the past year.
AEP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.71% yearly.
AEP shows a small growth in Revenue. In the last year, the Revenue has grown by 5.85%.
Measured over the past years, AEP shows a small growth in Revenue. The Revenue has been growing by 4.85% on average per year.
EPS 1Y (TTM)9.78%
EPS 3Y5.78%
EPS 5Y5.71%
EPS Q2Q%14.4%
Revenue 1Y (TTM)5.85%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.09%
3.2 Future
AEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.95% yearly.
Based on estimates for the next years, AEP will show a small growth in Revenue. The Revenue will grow by 5.54% on average per year.
EPS Next Y6.2%
EPS Next 2Y6.46%
EPS Next 3Y6.96%
EPS Next 5Y6.95%
Revenue Next Year4.01%
Revenue Next 2Y5.02%
Revenue Next 3Y5.03%
Revenue Next 5Y5.54%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.21, the valuation of AEP can be described as rather expensive.
AEP's Price/Earnings is on the same level as the industry average.
AEP is valuated rather cheaply when we compare the Price/Earnings ratio to 26.89, which is the current average of the S&P500 Index.
AEP is valuated rather expensively with a Price/Forward Earnings ratio of 18.31.
The rest of the industry has a similar Price/Forward Earnings ratio as AEP.
AEP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.21 | ||
| Fwd PE | 18.31 |
4.2 Price Multiples
AEP's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AEP does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of AEP may justify a higher PE ratio.
PEG (NY)3.1
PEG (5Y)3.36
EPS Next 2Y6.46%
EPS Next 3Y6.96%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.27%.
Compared to an average industry Dividend Yield of 3.23, AEP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.31, AEP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
5.2 History
The dividend of AEP has a limited annual growth rate of 5.62%.
AEP has paid a dividend for at least 10 years, which is a reliable track record.
AEP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.62%
Div Incr Years15
Div Non Decr Years20
5.3 Sustainability
AEP pays out 53.93% of its income as dividend. 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.
DP53.93%
EPS Next 2Y6.46%
EPS Next 3Y6.96%
NASDAQ:AEP (10/27/2025, 3:13:03 PM)
116.39
+0.41 (+0.35%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners85.1%
Inst Owner Change-0.04%
Ins Owners0.02%
Ins Owner Change6.33%
Market Cap62.24B
Revenue(TTM)20.67B
Net Income(TTM)3.65B
Analysts70.43
Price Target116.96 (0.49%)
Short Float %4.23%
Short Ratio7.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
Yearly Dividend3.6
Dividend Growth(5Y)5.62%
DP53.93%
Div Incr Years15
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.1%
Min EPS beat(2)8.95%
Max EPS beat(2)11.24%
EPS beat(4)3
Avg EPS beat(4)5.16%
Min EPS beat(4)-1.19%
Max EPS beat(4)11.24%
EPS beat(8)6
Avg EPS beat(8)2.64%
EPS beat(12)8
Avg EPS beat(12)2.26%
EPS beat(16)10
Avg EPS beat(16)1.83%
Revenue beat(2)2
Avg Revenue beat(2)3.06%
Min Revenue beat(2)1.47%
Max Revenue beat(2)4.64%
Revenue beat(4)2
Avg Revenue beat(4)-0.18%
Min Revenue beat(4)-5.22%
Max Revenue beat(4)4.64%
Revenue beat(8)2
Avg Revenue beat(8)-2.35%
Revenue beat(12)4
Avg Revenue beat(12)2.05%
Revenue beat(16)8
Avg Revenue beat(16)3.21%
PT rev (1m)0.1%
PT rev (3m)4.25%
EPS NQ rev (1m)-3.79%
EPS NQ rev (3m)-5.85%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.6%
Revenue NQ rev (1m)1.88%
Revenue NQ rev (3m)3.03%
Revenue NY rev (1m)-1.43%
Revenue NY rev (3m)-0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.21 | ||
| Fwd PE | 18.31 | ||
| P/S | 3.01 | ||
| P/FCF | N/A | ||
| P/OCF | 9.47 | ||
| P/B | 2.08 | ||
| P/tB | 2.08 | ||
| EV/EBITDA | 12.31 |
EPS(TTM)6.06
EY5.21%
EPS(NY)6.36
Fwd EY5.46%
FCF(TTM)-3.51
FCFYN/A
OCF(TTM)12.29
OCFY10.56%
SpS38.64
BVpS55.95
TBVpS55.85
PEG (NY)3.1
PEG (5Y)3.36
Graham Number87.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.39% | ||
| ROE | 12.2% | ||
| ROCE | 5.33% | ||
| ROIC | 4.14% | ||
| ROICexc | 4.16% | ||
| ROICexgc | 4.16% | ||
| OM | 24.82% | ||
| PM (TTM) | 17.66% | ||
| GM | 69.1% | ||
| FCFM | N/A |
ROA(3y)2.54%
ROA(5y)2.64%
ROE(3y)9.79%
ROE(5y)10.22%
ROIC(3y)3.55%
ROIC(5y)3.47%
ROICexc(3y)3.57%
ROICexc(5y)3.49%
ROICexgc(3y)3.58%
ROICexgc(5y)3.5%
ROCE(3y)4.66%
ROCE(5y)4.55%
ROICexgc growth 3Y2.86%
ROICexgc growth 5Y3.59%
ROICexc growth 3Y2.86%
ROICexc growth 5Y3.6%
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%
F-Score6
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.43 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.98 | ||
| Cap/Depr | 243.45% | ||
| Cap/Sales | 40.88% | ||
| Interest Coverage | 2.7 | ||
| Cash Conversion | 76.4% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.41 | ||
| Altman-Z | 0.96 |
F-Score6
WACC6.42%
ROIC/WACC0.65
Cap/Depr(3y)223.56%
Cap/Depr(5y)219.34%
Cap/Sales(3y)37.81%
Cap/Sales(5y)38.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.78%
EPS 3Y5.78%
EPS 5Y5.71%
EPS Q2Q%14.4%
EPS Next Y6.2%
EPS Next 2Y6.46%
EPS Next 3Y6.96%
EPS Next 5Y6.95%
Revenue 1Y (TTM)5.85%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.09%
Revenue Next Year4.01%
Revenue Next 2Y5.02%
Revenue Next 3Y5.03%
Revenue Next 5Y5.54%
EBIT growth 1Y26.94%
EBIT growth 3Y9.11%
EBIT growth 5Y10.1%
EBIT Next Year85.93%
EBIT Next 3Y30.64%
EBIT Next 5Y23.24%
FCF growth 1Y46.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y57.25%
OCF growth 3Y21.01%
OCF growth 5Y9.77%
AMERICAN ELECTRIC POWER / AEP FAQ
Can you provide the ChartMill fundamental rating for AMERICAN ELECTRIC POWER?
ChartMill assigns a fundamental rating of 4 / 10 to AEP.
What is the valuation status of AMERICAN ELECTRIC POWER (AEP) stock?
ChartMill assigns a valuation rating of 2 / 10 to AMERICAN ELECTRIC POWER (AEP). This can be considered as Overvalued.
Can you provide the profitability details for AMERICAN ELECTRIC POWER?
AMERICAN ELECTRIC POWER (AEP) has a profitability rating of 7 / 10.
How financially healthy is AMERICAN ELECTRIC POWER?
The financial health rating of AMERICAN ELECTRIC POWER (AEP) is 1 / 10.
What is the expected EPS growth for AMERICAN ELECTRIC POWER (AEP) stock?
The Earnings per Share (EPS) of AMERICAN ELECTRIC POWER (AEP) is expected to grow by 6.2% in the next year.