AMERICAN ELECTRIC POWER (AEP) Fundamental Analysis & Valuation

NASDAQ:AEP • US0255371017

Current stock price

130.1 USD
+1.25 (+0.97%)
At close:
130.1 USD
0 (0%)
After Hours:

This AEP fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. AEP Profitability Analysis

1.1 Basic Checks

  • In the past year AEP was profitable.
  • In the past year AEP had a positive cash flow from operations.
  • Each year in the past 5 years AEP has been profitable.
  • In the past 5 years AEP always reported a positive cash flow from operatings.
AEP Yearly Net Income VS EBIT VS OCF VS FCFAEP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 2B -2B 4B 6B

1.2 Ratios

  • The Return On Assets of AEP (3.13%) is better than 68.09% of its industry peers.
  • Looking at the Return On Equity, with a value of 11.48%, AEP is in the better half of the industry, outperforming 68.09% of the companies in the same industry.
  • With a Return On Invested Capital value of 4.14%, AEP perfoms like the industry average, outperforming 48.94% of the companies in the same industry.
  • AEP had an Average Return On Invested Capital over the past 3 years of 3.76%. This is in line with the industry average of 4.52%.
  • The 3 year average ROIC (3.76%) for AEP is below the current ROIC(4.14%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.13%
ROE 11.48%
ROIC 4.14%
ROA(3y)2.76%
ROA(5y)2.72%
ROE(3y)10.4%
ROE(5y)10.38%
ROIC(3y)3.76%
ROIC(5y)3.65%
AEP Yearly ROA, ROE, ROICAEP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8 10

1.3 Margins

  • AEP's Profit Margin of 16.36% is amongst the best of the industry. AEP outperforms 85.11% of its industry peers.
  • In the last couple of years the Profit Margin of AEP has grown nicely.
  • With a decent Operating Margin value of 24.62%, AEP is doing good in the industry, outperforming 68.09% 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 (67.86%) which is in line with its industry peers.
  • In the last couple of years the Gross Margin of AEP has declined.
Industry RankSector Rank
OM 24.62%
PM (TTM) 16.36%
GM 67.86%
OM growth 3Y8.91%
OM growth 5Y4.21%
PM growth 3Y11.69%
PM growth 5Y2.1%
GM growth 3Y2.05%
GM growth 5Y-3.33%
AEP Yearly Profit, Operating, Gross MarginsAEP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

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1

2. AEP Health Analysis

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
  • Compared to 1 year ago, AEP has an improved debt to assets ratio.
AEP Yearly Shares OutstandingAEP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M 500M
AEP Yearly Total Debt VS Total AssetsAEP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B

2.2 Solvency

  • Based on the Altman-Z score of 0.96, we must say that AEP is in the distress zone and has some risk of bankruptcy.
  • The Altman-Z score of AEP (0.96) is comparable to the rest of the industry.
  • A Debt/Equity ratio of 1.46 is on the high side and indicates that AEP has dependencies on debt financing.
  • The Debt to Equity ratio of AEP (1.46) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF N/A
Altman-Z 0.96
ROIC/WACC0.62
WACC6.71%
AEP Yearly LT Debt VS Equity VS FCFAEP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10B 20B 30B 40B

2.3 Liquidity

  • AEP has a Current Ratio of 0.45. 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 Current ratio of 0.45 is on the low side compared to the rest of the industry. AEP is outperformed by 93.62% of its industry peers.
  • AEP has a Quick Ratio of 0.45. 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 Quick ratio of 0.33. This is amonst the worse of the industry: AEP underperforms 89.36% of its industry peers.
Industry RankSector Rank
Current Ratio 0.45
Quick Ratio 0.33
AEP Yearly Current Assets VS Current LiabilitesAEP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B 10B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. AEP Growth Analysis

3.1 Past

  • The Earnings Per Share has been growing slightly by 6.24% over the past year.
  • The Earnings Per Share has been growing slightly by 6.07% on average over the past years.
  • The Revenue has grown by 10.93% in the past year. This is quite good.
  • AEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.96% yearly.
EPS 1Y (TTM)6.24%
EPS 3Y5.4%
EPS 5Y6.07%
EPS Q2Q%-4.03%
Revenue 1Y (TTM)10.93%
Revenue growth 3Y3.66%
Revenue growth 5Y7.96%
Sales Q2Q%13.15%

3.2 Future

  • Based on estimates for the next years, AEP will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.61% on average per year.
  • AEP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.38% yearly.
EPS Next Y7.51%
EPS Next 2Y7.74%
EPS Next 3Y8.34%
EPS Next 5Y8.61%
Revenue Next Year8.11%
Revenue Next 2Y6.39%
Revenue Next 3Y6.48%
Revenue Next 5Y8.38%

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.
AEP Yearly Revenue VS EstimatesAEP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 10B 20B 30B
AEP Yearly EPS VS EstimatesAEP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 4 6 8

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1

4. AEP Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 21.83, which indicates a rather expensive current valuation of AEP.
  • Compared to the rest of the industry, the Price/Earnings ratio of AEP indicates a slightly more expensive valuation: AEP is more expensive than 65.96% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 24.88, AEP is valued at the same level.
  • AEP is valuated rather expensively with a Price/Forward Earnings ratio of 20.30.
  • Based on the Price/Forward Earnings ratio, AEP is valued a bit more expensive than the industry average as 61.70% of the companies are valued more cheaply.
  • AEP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.19.
Industry RankSector Rank
PE 21.83
Fwd PE 20.3
AEP Price Earnings VS Forward Price EarningsAEP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20

4.2 Price Multiples

  • 63.83% of the companies in the same industry are cheaper than AEP, based on the Enterprise Value to EBITDA ratio.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 13.11
AEP Per share dataAEP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40

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)2.91
PEG (5Y)3.6
EPS Next 2Y7.74%
EPS Next 3Y8.34%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. AEP Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.95%, AEP has a reasonable but not impressive dividend return.
  • Compared to an average industry Dividend Yield of 2.86, AEP has a dividend in line with its industry peers.
  • Compared to an average S&P500 Dividend Yield of 1.89, AEP pays a better dividend.
Industry RankSector Rank
Dividend Yield 2.95%

5.2 History

  • The dividend of AEP has a limited annual growth rate of 5.40%.
  • AEP has paid a dividend for at least 10 years, which is a reliable track record.
  • AEP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.4%
Div Incr Years15
Div Non Decr Years20
AEP Yearly Dividends per shareAEP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3

5.3 Sustainability

  • AEP pays out 56.09% of its income as dividend. 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.
DP56.09%
EPS Next 2Y7.74%
EPS Next 3Y8.34%
AEP Yearly Income VS Free CF VS DividendAEP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 2B -2B
AEP Dividend Payout.AEP Dividend Payout, showing the Payout Ratio.AEP Dividend Payout.PayoutRetained Earnings

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AEP Fundamentals: All Metrics, Ratios and Statistics

AMERICAN ELECTRIC POWER

NASDAQ:AEP (3/27/2026, 8:00:00 PM)

After market: 130.1 0 (0%)

130.1

+1.25 (+0.97%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)02-12
Earnings (Next)05-04
Inst Owners84.54%
Inst Owner Change-0.16%
Ins Owners0.02%
Ins Owner Change13.7%
Market Cap70.37B
Revenue(TTM)21.88B
Net Income(TTM)3.58B
Analysts73.57
Price Target140.04 (7.64%)
Short Float %3.48%
Short Ratio5.37
Dividend
Industry RankSector Rank
Dividend Yield 2.95%
Yearly Dividend3.74
Dividend Growth(5Y)5.4%
DP56.09%
Div Incr Years15
Div Non Decr Years20
Ex-Date02-10
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.61%
Min EPS beat(2)-1.41%
Max EPS beat(2)2.62%
EPS beat(4)3
Avg EPS beat(4)5.35%
Min EPS beat(4)-1.41%
Max EPS beat(4)11.24%
EPS beat(8)6
Avg EPS beat(8)2.82%
EPS beat(12)7
Avg EPS beat(12)1.7%
EPS beat(16)10
Avg EPS beat(16)1.83%
Revenue beat(2)2
Avg Revenue beat(2)5.65%
Min Revenue beat(2)3.65%
Max Revenue beat(2)7.66%
Revenue beat(4)4
Avg Revenue beat(4)4.36%
Min Revenue beat(4)1.47%
Max Revenue beat(4)7.66%
Revenue beat(8)4
Avg Revenue beat(8)0.67%
Revenue beat(12)4
Avg Revenue beat(12)-1.39%
Revenue beat(16)8
Avg Revenue beat(16)3.11%
PT rev (1m)3.15%
PT rev (3m)3.3%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)1.5%
EPS NY rev (1m)0.34%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)1.65%
Revenue NQ rev (3m)1.97%
Revenue NY rev (1m)0.71%
Revenue NY rev (3m)0.75%
Valuation
Industry RankSector Rank
PE 21.83
Fwd PE 20.3
P/S 3.22
P/FCF N/A
P/OCF 10.13
P/B 2.26
P/tB 2.26
EV/EBITDA 13.11
EPS(TTM)5.96
EY4.58%
EPS(NY)6.41
Fwd EY4.93%
FCF(TTM)-3.03
FCFYN/A
OCF(TTM)12.84
OCFY9.87%
SpS40.45
BVpS57.64
TBVpS57.54
PEG (NY)2.91
PEG (5Y)3.6
Graham Number87.92
Profitability
Industry RankSector Rank
ROA 3.13%
ROE 11.48%
ROCE 5.32%
ROIC 4.14%
ROICexc 4.16%
ROICexgc 4.16%
OM 24.62%
PM (TTM) 16.36%
GM 67.86%
FCFM N/A
ROA(3y)2.76%
ROA(5y)2.72%
ROE(3y)10.4%
ROE(5y)10.38%
ROIC(3y)3.76%
ROIC(5y)3.65%
ROICexc(3y)3.78%
ROICexc(5y)3.68%
ROICexgc(3y)3.78%
ROICexgc(5y)3.68%
ROCE(3y)4.88%
ROCE(5y)4.77%
ROICexgc growth 3Y5.55%
ROICexgc growth 5Y5.09%
ROICexc growth 3Y5.55%
ROICexc growth 5Y5.09%
OM growth 3Y8.91%
OM growth 5Y4.21%
PM growth 3Y11.69%
PM growth 5Y2.1%
GM growth 3Y2.05%
GM growth 5Y-3.33%
F-Score5
Asset Turnover0.19
Health
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF N/A
Debt/EBITDA 5.14
Cap/Depr 246%
Cap/Sales 39.23%
Interest Coverage 2.84
Cash Conversion 78.25%
Profit Quality N/A
Current Ratio 0.45
Quick Ratio 0.33
Altman-Z 0.96
F-Score5
WACC6.71%
ROIC/WACC0.62
Cap/Depr(3y)236.86%
Cap/Depr(5y)222.94%
Cap/Sales(3y)39.39%
Cap/Sales(5y)37.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.24%
EPS 3Y5.4%
EPS 5Y6.07%
EPS Q2Q%-4.03%
EPS Next Y7.51%
EPS Next 2Y7.74%
EPS Next 3Y8.34%
EPS Next 5Y8.61%
Revenue 1Y (TTM)10.93%
Revenue growth 3Y3.66%
Revenue growth 5Y7.96%
Sales Q2Q%13.15%
Revenue Next Year8.11%
Revenue Next 2Y6.39%
Revenue Next 3Y6.48%
Revenue Next 5Y8.38%
EBIT growth 1Y21.12%
EBIT growth 3Y12.9%
EBIT growth 5Y12.5%
EBIT Next Year84.22%
EBIT Next 3Y31.35%
EBIT Next 5Y22.67%
FCF growth 1Y-69.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.05%
OCF growth 3Y9.51%
OCF growth 5Y12.62%

AMERICAN ELECTRIC POWER / AEP Fundamental Analysis 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 1 / 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 7.51% in the next year.