116.91 USD
+0.98 (+0.85%)
117.448 USD
+0.54 (+0.46%)
AEP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 46 industry peers in the Electric Utilities industry. While AEP has a great profitability rating, there are quite some concerns on its financial health. AEP is quite expensive at the moment. It does show a decent growth rate. 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.
In the past 5 years AEP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AEP (3.32%) is better than 73.91% of its industry peers.
AEP has a better Return On Equity (12.03%) than 65.22% of its industry peers.
AEP's Return On Invested Capital of 4.13% is in line compared to the rest of the industry. AEP outperforms 45.65% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AEP is in line with the industry average of 4.58%.
The 3 year average ROIC (3.55%) for AEP is below the current ROIC(4.13%), indicating increased profibility in the last year.
| 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's Profit Margin of 17.23% is amongst the best of the industry. AEP outperforms 86.96% 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 67.39% 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 (68.45%) which is comparable to the rest of the industry.
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
The number of shares outstanding for AEP has been increased compared to 5 years ago.
The debt/assets ratio for AEP has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.98, we must say that AEP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AEP (0.98) is better than 65.22% 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.
AEP's Debt to Equity ratio of 1.49 is in line compared to the rest of the industry. AEP outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.98 |
ROIC/WACC0.63
WACC6.53%
2.3 Liquidity
A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.69, AEP is doing worse than 76.09% of the companies in the same industry.
AEP has a Quick Ratio of 0.69. 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's Quick ratio of 0.53 is on the low side compared to the rest of the industry. AEP is outperformed by 73.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
AEP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.32%.
Measured over the past 5 years, AEP shows a small growth in Earnings Per Share. The EPS has been growing by 5.71% on average per year.
AEP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.44%.
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%11.3%
3.2 Future
AEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.89% yearly.
The Revenue is expected to grow by 7.00% on average over the next years.
EPS Next Y6.48%
EPS Next 2Y6.71%
EPS Next 3Y7.04%
EPS Next 5Y7.89%
Revenue Next Year5.6%
Revenue Next 2Y6.68%
Revenue Next 3Y6.51%
Revenue Next 5Y7%
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 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 19.45 indicates a rather expensive valuation of AEP.
The rest of the industry has a similar Price/Earnings ratio as AEP.
AEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.19.
Based on the Price/Forward Earnings ratio of 18.30, the valuation of AEP can be described as rather expensive.
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 23.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.45 | ||
| Fwd PE | 18.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AEP is valued a bit more expensive than the industry average as 60.87% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.11 |
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
PEG (5Y)3.41
EPS Next 2Y6.71%
EPS Next 3Y7.04%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.30%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.05, AEP has a dividend in line with its industry peers.
AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
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
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 2Y6.71%
EPS Next 3Y7.04%
116.91
+0.98 (+0.85%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners86.2%
Inst Owner Change0%
Ins Owners0.02%
Ins Owner Change5.56%
Market Cap62.44B
Revenue(TTM)21.26B
Net Income(TTM)3.66B
Analysts71.85
Price Target131.68 (12.63%)
Short Float %4.25%
Short Ratio6.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
Yearly Dividend3.6
Dividend Growth(5Y)5.62%
DP54.46%
Div Incr Years15
Div Non Decr Years20
Ex-DateN/A
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)2.19%
PT rev (3m)12.59%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)8.91%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)0.33%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.45 | ||
| Fwd PE | 18.3 | ||
| P/S | 2.94 | ||
| P/FCF | N/A | ||
| P/OCF | 9.1 | ||
| P/B | 2.05 | ||
| P/tB | 2.05 | ||
| EV/EBITDA | 12.11 |
EPS(TTM)6.01
EY5.14%
EPS(NY)6.39
Fwd EY5.46%
FCF(TTM)-3.25
FCFYN/A
OCF(TTM)12.84
OCFY10.98%
SpS39.8
BVpS57.01
TBVpS56.91
PEG (NY)3
PEG (5Y)3.41
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 | 0.98 |
F-Score6
WACC6.53%
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 Y6.48%
EPS Next 2Y6.71%
EPS Next 3Y7.04%
EPS Next 5Y7.89%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.3%
Revenue Next Year5.6%
Revenue Next 2Y6.68%
Revenue Next 3Y6.51%
Revenue Next 5Y7%
EBIT growth 1Y31.19%
EBIT growth 3Y9.11%
EBIT growth 5Y10.1%
EBIT Next Year82.5%
EBIT Next 3Y30.52%
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.
Can you provide the valuation status for AMERICAN ELECTRIC POWER?
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.
What is the financial health of AMERICAN ELECTRIC POWER (AEP) stock?
The financial health rating of AMERICAN ELECTRIC POWER (AEP) is 1 / 10.
What is the earnings growth outlook for AMERICAN ELECTRIC POWER?
The Earnings per Share (EPS) of AMERICAN ELECTRIC POWER (AEP) is expected to grow by 6.48% in the next year.