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.
  • AEP had a positive operating cash flow in the past year.
  • AEP had positive earnings in each of the past 5 years.
  • 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

  • Looking at the Return On Assets, with a value of 3.13%, AEP is in the better half of the industry, outperforming 68.09% of the companies in the same industry.
  • AEP has a better Return On Equity (11.48%) than 68.09% of its industry peers.
  • AEP has a Return On Invested Capital of 4.14%. This is comparable to the rest of the industry: AEP outperforms 48.94% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for AEP is in line with the industry average of 4.52%.
  • The last Return On Invested Capital (4.14%) for AEP is above the 3 year average (3.76%), which is a sign of increasing profitability.
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

  • The Profit Margin of AEP (16.36%) is better than 85.11% of its industry peers.
  • AEP's Profit Margin has improved in the last couple of years.
  • AEP has a better Operating Margin (24.62%) than 68.09% of its industry peers.
  • In the last couple of years the Operating Margin of AEP has grown nicely.
  • Looking at the Gross Margin, with a value of 67.86%, AEP is in line with its industry, outperforming 57.45% of the companies in the same industry.
  • 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.
  • 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.
  • The debt/assets ratio for AEP has been reduced compared to a year ago.
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

  • 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 has a Altman-Z score (0.97) which is in line with its industry peers.
  • AEP has a Debt/Equity ratio of 1.46. This is a high value indicating a heavy dependency on external financing.
  • AEP has a Debt to Equity ratio (1.46) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF N/A
Altman-Z 0.97
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

  • A Current Ratio of 0.45 indicates that AEP may have some problems paying its short term obligations.
  • AEP has a Current ratio of 0.45. This is amonst the worse of the industry: AEP underperforms 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.
  • Looking at the Quick ratio, with a value of 0.33, AEP is doing worse than 89.36% of the companies in the same industry.
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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5

3. AEP Growth Analysis

3.1 Past

  • The Earnings Per Share has been growing slightly by 6.24% over the past year.
  • AEP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.07% yearly.
  • The Revenue has grown by 10.93% in the past year. This is quite good.
  • The Revenue has been growing slightly by 7.96% on average over the past years.
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

  • The Earnings Per Share is expected to grow by 8.61% on average over the next years. This is quite good.
  • Based on estimates for the next years, AEP will show a quite strong growth in Revenue. The Revenue will grow by 8.38% on average per year.
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

  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • 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

  • A Price/Earnings ratio of 21.83 indicates a rather expensive valuation of AEP.
  • Based on the Price/Earnings ratio, AEP is valued a bit more expensive than the industry average as 65.96% of the companies are valued more cheaply.
  • Compared to an average S&P500 Price/Earnings ratio of 24.88, AEP is valued at the same level.
  • The Price/Forward Earnings ratio is 20.30, which indicates a rather expensive current valuation of AEP.
  • Based on the Price/Forward Earnings ratio, AEP is valued a bit more expensive than 61.70% of the companies in the same industry.
  • 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 13.19
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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7

5. AEP Dividend Analysis

5.1 Amount

  • AEP has a Yearly Dividend Yield of 2.95%. Purely for dividend investing, there may be better candidates out there.
  • AEP's Dividend Yield is comparable with the industry average which is at 2.86.
  • AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
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 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)5.4%
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

  • 56.09% 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.
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 Change12.6%
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)3.28%
PT rev (3m)6.35%
EPS NQ rev (1m)0.77%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0.34%
EPS NY rev (3m)0.31%
Revenue NQ rev (1m)2.67%
Revenue NQ rev (3m)1.97%
Revenue NY rev (1m)0.71%
Revenue NY rev (3m)0.42%
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 13.19
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 0.97
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.