AMERICAN ELECTRIC POWER (AEP) Stock Fundamental Analysis
USA - NASDAQ:AEP - US0255371017 - Common Stock
115.98 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. While AEP belongs to the best of the industry regarding profitability, 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
The Return On Assets of AEP (3.39%) is better than 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.
AEP's Return On Invested Capital of 4.14% is in line compared to the rest of the industry. AEP outperforms 51.06% of its industry peers.
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 4.90%.
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.
In the last couple of years the Profit Margin of AEP has grown nicely.
AEP has a better Operating Margin (24.82%) than 68.09% of its industry peers.
AEP's Operating Margin has improved in the last couple of years.
The Gross Margin of AEP (69.10%) is better 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.
The number of shares outstanding for AEP has been increased compared to 1 year ago.
The number of shares outstanding for AEP has been increased compared to 5 years ago.
Compared to 1 year ago, AEP has an improved debt to assets ratio.
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.
With a Altman-Z score value of 0.96, AEP perfoms like the industry average, outperforming 53.19% of the companies in the same industry.
A Debt/Equity ratio of 1.43 is on the high side and indicates that AEP has dependencies on debt financing.
The Debt to Equity ratio of AEP (1.43) is comparable to the rest of the 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's Current ratio of 0.55 is on the low side compared to the rest of the industry. AEP is outperformed by 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
AEP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.78%, which is quite good.
The Earnings Per Share has been growing slightly by 5.71% on average over the past years.
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
Based on estimates for the next years, AEP will show a small growth in Earnings Per Share. The EPS will grow by 6.95% on average per year.
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
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.14, which indicates a rather expensive current 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 (27.08), we can say AEP is valued slightly cheaper.
A Price/Forward Earnings ratio of 18.24 indicates a rather expensive valuation of AEP.
The rest of the industry has a similar Price/Forward Earnings ratio as AEP.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.09, AEP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.14 | ||
| Fwd PE | 18.24 |
4.2 Price Multiples
AEP's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.34 |
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)3.09
PEG (5Y)3.35
EPS Next 2Y6.46%
EPS Next 3Y6.96%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.27%. Purely for dividend investing, there may be better candidates out there.
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 2.30, 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 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
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 (10/28/2025, 10:12:05 AM)
115.98
-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 Cap62.02B
Revenue(TTM)20.67B
Net Income(TTM)3.65B
Analysts70.43
Price Target116.96 (0.84%)
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 | 19.14 | ||
| Fwd PE | 18.24 | ||
| P/S | 3 | ||
| P/FCF | N/A | ||
| P/OCF | 9.44 | ||
| P/B | 2.07 | ||
| P/tB | 2.08 | ||
| EV/EBITDA | 12.34 |
EPS(TTM)6.06
EY5.23%
EPS(NY)6.36
Fwd EY5.48%
FCF(TTM)-3.51
FCFYN/A
OCF(TTM)12.29
OCFY10.59%
SpS38.64
BVpS55.95
TBVpS55.85
PEG (NY)3.09
PEG (5Y)3.35
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.