Taking everything into account, AES scores 4 out of 10 in our fundamental rating. AES was compared to 20 industry peers in the Independent Power and Renewable Electricity Producers industry. AES has a medium profitability rating, but doesn't score so well on its financial health evaluation. AES has a decent growth rate and is not valued too expensively. AES also has an excellent dividend rating.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year AES was profitable.
In the past year AES had a positive cash flow from operations.
In multiple years AES reported negative net income over the last 5 years.
Each year in the past 5 years AES had a positive operating cash flow.

1.2 Ratios

AES has a better Return On Assets (2.23%) than 80.00% of its industry peers.
AES has a Return On Equity of 29.37%. This is amongst the best in the industry. AES outperforms 95.00% of its industry peers.
AES's Return On Invested Capital of 3.43% is fine compared to the rest of the industry. AES outperforms 75.00% of its industry peers.
AES had an Average Return On Invested Capital over the past 3 years of 5.05%. This is in line with the industry average of 4.09%.

		Industry Rank	Sector Rank
ROA	2.23%
ROE	29.37%
ROIC	3.43%

ROA(3y)0.89%

ROA(5y)0.31%

ROE(3y)11.23%

ROE(5y)4.16%

ROIC(3y)5.05%

ROIC(5y)6.06%

1.3 Margins

With a decent Profit Margin value of 9.38%, AES is doing good in the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Profit Margin of AES has grown nicely.
With a decent Operating Margin value of 14.83%, AES is doing good in the industry, outperforming 70.00% of the companies in the same industry.
AES's Operating Margin has declined in the last couple of years.
AES has a worse Gross Margin (17.26%) than 80.00% of its industry peers.
In the last couple of years the Gross Margin of AES has declined.

		Industry Rank	Sector Rank
OM	14.83%
PM (TTM)	9.38%
GM	17.26%

OM growth 3Y-13.97%

OM growth 5Y-4.63%

PM growth 3YN/A

PM growth 5Y35.68%

GM growth 3Y-8.16%

GM growth 5Y-3.95%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AES is destroying value.
AES has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AES has more shares outstanding
Compared to 1 year ago, AES has a worse debt to assets ratio.

2.2 Solvency

AES has an Altman-Z score of 0.44. This is a bad value and indicates that AES is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AES (0.44) is comparable to the rest of the industry.
A Debt/Equity ratio of 6.85 is on the high side and indicates that AES has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 6.85, AES is doing worse than 80.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	6.85
Debt/FCF	N/A
Altman-Z	0.44

ROIC/WACC0.63

WACC5.46%

2.3 Liquidity

A Current Ratio of 0.72 indicates that AES may have some problems paying its short term obligations.
The Current ratio of AES (0.72) is worse than 65.00% of its industry peers.
AES has a Quick Ratio of 0.72. This is a bad value and indicates that AES is not financially healthy enough and could expect problems in meeting its short term obligations.
AES has a worse Quick ratio (0.66) than 65.00% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.72
Quick Ratio	0.66

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AES shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.78%.
The Earnings Per Share has been growing by 9.23% on average over the past years. This is quite good.
The Revenue has decreased by -1.55% in the past year.
The Revenue has been growing slightly by 3.80% on average over the past years.

EPS 1Y (TTM)-10.78%

EPS 3Y11.42%

EPS 5Y9.23%

EPS Q2Q%5.63%

Revenue 1Y (TTM)-1.55%

Revenue growth 3Y3.29%

Revenue growth 5Y3.8%

Sales Q2Q%1.89%

3.2 Future

AES is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.68% yearly.
AES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.94% yearly.

EPS Next Y2.23%

EPS Next 2Y4.6%

EPS Next 3Y3.8%

EPS Next 5Y5.68%

Revenue Next Year-2.73%

Revenue Next 2Y0.69%

Revenue Next 3Y1.86%

Revenue Next 5Y8.94%

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 decreasing.
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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 6.88 indicates a rather cheap valuation of AES.
Compared to the rest of the industry, the Price/Earnings ratio of AES indicates a rather cheap valuation: AES is cheaper than 95.00% of the companies listed in the same industry.
AES is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.12, which indicates a rather cheap valuation of AES.
AES's Price/Forward Earnings ratio is rather cheap when compared to the industry. AES is cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.26. AES is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	6.88
Fwd PE	6.12

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, AES is valued a bit cheaper than 65.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	12.39

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.

PEG (NY)3.09

PEG (5Y)0.75

EPS Next 2Y4.6%

EPS Next 3Y3.8%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 4.82%, AES is a good candidate for dividend investing.
AES's Dividend Yield is rather good when compared to the industry average which is at 1.37. AES pays more dividend than 85.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.81, AES pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	4.82%

5.2 History

The dividend of AES has a limited annual growth rate of 5.08%.
AES has paid a dividend for at least 10 years, which is a reliable track record.
AES has not decreased their dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)5.08%

Div Incr Years12

Div Non Decr Years12

5.3 Sustainability

AES pays out 43.88% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of AES is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.

DP43.88%

EPS Next 2Y4.6%

EPS Next 3Y3.8%

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AES CORP / AES FAQ

What is the ChartMill fundamental rating of AES CORP (AES) stock?

ChartMill assigns a fundamental rating of 4 / 10 to AES.

What is the valuation status for AES stock?

ChartMill assigns a valuation rating of 5 / 10 to AES CORP (AES). This can be considered as Fairly Valued.

What is the profitability of AES stock?

AES CORP (AES) has a profitability rating of 5 / 10.

What is the financial health of AES CORP (AES) stock?

The financial health rating of AES CORP (AES) is 0 / 10.

Is the dividend of AES CORP sustainable?

The dividend rating of AES CORP (AES) is 8 / 10 and the dividend payout ratio is 43.88%.