115.77 USD
+1.64 (+1.44%)
115.75 USD
-0.02 (-0.02%)
AEP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 48 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. Finally AEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
AEP had positive earnings in the past year.
In the past year AEP had a positive cash flow from operations.
In the past 5 years AEP has always been profitable.
Each year in the past 5 years AEP had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AEP (3.32%) is better than 70.83% of its industry peers.
The Return On Equity of AEP (12.03%) is better than 66.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.13%, AEP is in line with its industry, outperforming 43.75% of the companies in the same industry.
AEP had an Average Return On Invested Capital over the past 3 years of 3.55%. This is in line with the industry average of 4.97%.
The last Return On Invested Capital (4.13%) for AEP is above the 3 year average (3.55%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 12.03% | ||
| ROIC | 4.13% |
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
AEP has a better Profit Margin (17.23%) than 87.50% of its industry peers.
In the last couple of years the Profit Margin of AEP has grown nicely.
Looking at the Operating Margin, with a value of 24.93%, AEP is in the better half of the industry, outperforming 68.75% 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 comparable to the rest of the industry: AEP outperforms 58.33% of its industry peers.
AEP's Gross Margin has declined in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AEP is destroying value.
Compared to 1 year ago, AEP has more shares outstanding
Compared to 5 years ago, AEP has more shares outstanding
The debt/assets ratio for AEP has been reduced compared to a year ago.
2.2 Solvency
AEP has an Altman-Z score of 0.97. 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 0.97 is fine compared to the rest of the industry. AEP outperforms 62.50% of its industry peers.
A Debt/Equity ratio of 1.49 is on the high side and indicates that AEP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.49, AEP is in line with its industry, outperforming 45.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.97 |
ROIC/WACC0.63
WACC6.51%
2.3 Liquidity
A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
AEP's Current ratio of 0.69 is on the low side compared to the rest of the industry. AEP is outperformed by 79.17% of its industry peers.
A Quick Ratio of 0.53 indicates that AEP may have some problems paying its short term obligations.
AEP has a Quick ratio of 0.53. This is in the lower half of the industry: AEP underperforms 77.08% of its industry peers.
| 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.
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)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%11.3%
3.2 Future
Based on estimates for the next years, AEP will show a small growth in Earnings Per Share. The EPS will grow by 7.89% on average per year.
Based on estimates for the next years, AEP will show a small growth in Revenue. The Revenue will grow by 7.00% on average per year.
EPS Next Y6.6%
EPS Next 2Y6.76%
EPS Next 3Y7.06%
EPS Next 5Y7.89%
Revenue Next Year5.46%
Revenue Next 2Y6.51%
Revenue Next 3Y6.39%
Revenue Next 5Y7%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 19.26 indicates a rather expensive valuation of AEP.
Compared to the rest of the industry, the Price/Earnings ratio of AEP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.55. AEP is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 18.11, which indicates a rather expensive current valuation of AEP.
AEP's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.78, AEP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.26 | ||
| Fwd PE | 18.11 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AEP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AEP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.92
PEG (5Y)3.37
EPS Next 2Y6.76%
EPS Next 3Y7.06%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.33%. Purely for dividend investing, there may be better candidates out there.
AEP's Dividend Yield is comparable with the industry average which is at 3.09.
AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
5.2 History
The dividend of AEP has a limited annual growth rate of 5.62%.
AEP has been paying a dividend for at least 10 years, so it has 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
54.46% of the earnings are spent on dividend by AEP. This is a bit on the high side, but may be sustainable.
AEP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP54.46%
EPS Next 2Y6.76%
EPS Next 3Y7.06%
115.77
+1.64 (+1.44%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners85.99%
Inst Owner Change-0.2%
Ins Owners0.02%
Ins Owner Change-0.11%
Market Cap61.83B
Revenue(TTM)21.26B
Net Income(TTM)3.66B
Analysts71.85
Price Target131.27 (13.39%)
Short Float %4.11%
Short Ratio6.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
Yearly Dividend3.6
Dividend Growth(5Y)5.62%
DP54.46%
Div Incr Years15
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.92%
Min EPS beat(2)-1.41%
Max EPS beat(2)11.24%
EPS beat(4)2
Avg EPS beat(4)4.4%
Min EPS beat(4)-1.41%
Max EPS beat(4)11.24%
EPS beat(8)5
Avg EPS beat(8)2.09%
EPS beat(12)7
Avg EPS beat(12)1.92%
EPS beat(16)10
Avg EPS beat(16)1.91%
Revenue beat(2)2
Avg Revenue beat(2)2.56%
Min Revenue beat(2)1.47%
Max Revenue beat(2)3.65%
Revenue beat(4)3
Avg Revenue beat(4)1.14%
Min Revenue beat(4)-5.22%
Max Revenue beat(4)4.64%
Revenue beat(8)3
Avg Revenue beat(8)-1.72%
Revenue beat(12)4
Avg Revenue beat(12)1.1%
Revenue beat(16)8
Avg Revenue beat(16)3.12%
PT rev (1m)5.81%
PT rev (3m)12.35%
EPS NQ rev (1m)-0.49%
EPS NQ rev (3m)8.55%
EPS NY rev (1m)0.16%
EPS NY rev (3m)0.36%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.16%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.26 | ||
| Fwd PE | 18.11 | ||
| P/S | 2.91 | ||
| P/FCF | N/A | ||
| P/OCF | 9.02 | ||
| P/B | 2.03 | ||
| P/tB | 2.03 | ||
| EV/EBITDA | 12 |
EPS(TTM)6.01
EY5.19%
EPS(NY)6.39
Fwd EY5.52%
FCF(TTM)-3.25
FCFYN/A
OCF(TTM)12.84
OCFY11.09%
SpS39.8
BVpS57.01
TBVpS56.91
PEG (NY)2.92
PEG (5Y)3.37
Graham Number87.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 12.03% | ||
| ROCE | 5.29% | ||
| ROIC | 4.13% | ||
| ROICexc | 4.18% | ||
| ROICexgc | 4.18% | ||
| OM | 24.93% | ||
| PM (TTM) | 17.23% | ||
| GM | 68.45% | ||
| 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 | 1.49 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.16 | ||
| Cap/Depr | 245.73% | ||
| Cap/Sales | 40.43% | ||
| Interest Coverage | 2.78 | ||
| Cash Conversion | 77.96% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 0.97 |
F-Score6
WACC6.51%
ROIC/WACC0.63
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)7.32%
EPS 3Y5.78%
EPS 5Y5.71%
EPS Q2Q%-2.7%
EPS Next Y6.6%
EPS Next 2Y6.76%
EPS Next 3Y7.06%
EPS Next 5Y7.89%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.3%
Revenue Next Year5.46%
Revenue Next 2Y6.51%
Revenue Next 3Y6.39%
Revenue Next 5Y7%
EBIT growth 1Y31.19%
EBIT growth 3Y9.11%
EBIT growth 5Y10.1%
EBIT Next Year81.64%
EBIT Next 3Y30.39%
EBIT Next 5Y22.43%
FCF growth 1Y50.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.11%
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 6.6% in the next year.