119.775 USD
+0.57 (+0.47%)
At close: Jan 30, 2026
119.775 USD
0 (0%)
After Hours: 1/30/2026, 8:00:00 PM
We assign a fundamental rating of 4 out of 10 to AEP. AEP was compared to 46 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. AEP is quite expensive at the moment. It does show a decent growth rate. Finally AEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year AEP was profitable.
- In the past year AEP had a positive cash flow from operations.
- AEP had positive earnings in each of the past 5 years.
- Each year in the past 5 years AEP had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.32%, AEP is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
- The Return On Equity of AEP (12.03%) is better than 63.04% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 4.13%, AEP is in line with its industry, outperforming 45.65% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AEP is in line with the industry average of 4.57%.
- 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
- Looking at the Profit Margin, with a value of 17.23%, AEP belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
- AEP's Profit Margin has improved in the last couple of years.
- With a decent Operating Margin value of 24.93%, AEP is doing good in the industry, outperforming 67.39% of the companies in the same industry.
- AEP's Operating Margin has improved in the last couple of years.
- AEP has a Gross Margin (68.45%) which is in line with its industry peers.
- 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
- AEP has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, AEP has an improved debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 0.99, we must say that AEP is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.99, AEP is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
- A Debt/Equity ratio of 1.49 is on the high side and indicates that AEP has dependencies on debt financing.
- AEP has a Debt to Equity ratio of 1.49. This is comparable 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 | 0.99 |
ROIC/WACC0.63
WACC6.6%
2.3 Liquidity
- A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
- AEP's Current ratio of 0.69 is on the low side compared to the rest of the industry. AEP is outperformed by 76.09% of its industry peers.
- 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.
- Looking at the Quick ratio, with a value of 0.53, AEP is doing worse than 73.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.32% over the past year.
- AEP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.71% yearly.
- AEP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.44%.
- 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)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
- The Earnings Per Share is expected to grow by 8.09% on average over the next years. This is quite good.
- AEP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.46% yearly.
EPS Next Y6.51%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
EPS Next 5Y8.09%
Revenue Next Year5.56%
Revenue Next 2Y6.52%
Revenue Next 3Y6.39%
Revenue Next 5Y7.46%
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
- AEP is valuated rather expensively with a Price/Earnings ratio of 19.93.
- AEP's Price/Earnings ratio is in line with the industry average.
- AEP is valuated rather cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 18.76, AEP is valued on the expensive side.
- AEP's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, AEP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.93 | ||
| Fwd PE | 18.76 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AEP is valued a bit more expensive than 60.87% of the companies in the same industry.
| 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.
- AEP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.06
PEG (5Y)3.49
EPS Next 2Y6.69%
EPS Next 3Y7.04%
5. Dividend
5.1 Amount
- AEP has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
- AEP's Dividend Yield is comparable with the industry average which is at 2.90.
- Compared to an average S&P500 Dividend Yield of 1.83, AEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
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.
- AEP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP54.46%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
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 6.51% in the next year.