AMERICAN ELECTRIC POWER (AEP) Fundamental Analysis & Valuation
NASDAQ:AEP • US0255371017
132.31 USD
+0.45 (+0.34%)
At close: Mar 10, 2026
132.31 USD
0 (0%)
After Hours: 3/10/2026, 8:05:07 PM
This AEP fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
Taking everything into account, AEP scores 4 out of 10 in our fundamental rating. 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. AEP Profitability Analysis
1.1 Basic Checks
- AEP had positive earnings in the past year.
- In the past year AEP had a positive cash flow from operations.
- Each year in the past 5 years AEP has been profitable.
- Each year in the past 5 years AEP had a positive operating cash flow.
1.2 Ratios
- AEP has a Return On Assets of 3.13%. This is in the better half of the industry: AEP outperforms 67.39% of its industry peers.
- With a decent Return On Equity value of 11.48%, AEP is doing good in the industry, outperforming 65.22% 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 47.83% of its industry peers.
- 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 4.49%.
- 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 Rank | Sector 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%
1.3 Margins
- The Profit Margin of AEP (16.36%) is better than 84.78% of its industry peers.
- In the last couple of years the Profit Margin of AEP has grown nicely.
- AEP's Operating Margin of 24.62% is fine compared to the rest of the industry. AEP outperforms 67.39% of its industry peers.
- AEP's Operating Margin has improved in the last couple of years.
- The Gross Margin of AEP (67.86%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of AEP has declined.
| Industry Rank | Sector 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%
2. AEP Health Analysis
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
- Compared to 5 years ago, AEP has more shares outstanding
- The debt/assets ratio for AEP has been reduced compared to a year ago.
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 better Altman-Z score (0.97) than 63.04% of its industry peers.
- A Debt/Equity ratio of 1.46 is on the high side and indicates that AEP has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 1.46, AEP is in line with its industry, outperforming 56.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.97 |
ROIC/WACC0.63
WACC6.54%
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 93.48% of its industry peers.
- A Quick Ratio of 0.33 indicates that AEP may have some problems paying its short term obligations.
- The Quick ratio of AEP (0.33) is worse than 91.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.45 | ||
| Quick Ratio | 0.33 |
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.
- AEP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.93%.
- Measured over the past years, AEP shows a small growth in Revenue. The Revenue has been growing by 7.96% on average per year.
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
- AEP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.61% yearly.
- 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 Year7.48%
Revenue Next 2Y6.08%
Revenue Next 3Y6.27%
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.
- 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. AEP Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 22.20, AEP is valued on the expensive side.
- Compared to the rest of the industry, the Price/Earnings ratio of AEP indicates a slightly more expensive valuation: AEP is more expensive than 67.39% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of AEP to the average of the S&P500 Index (26.25), we can say AEP is valued inline with the index average.
- AEP is valuated rather expensively with a Price/Forward Earnings ratio of 20.65.
- 65.22% of the companies in the same industry are cheaper than AEP, based on the Price/Forward Earnings ratio.
- AEP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.2 | ||
| Fwd PE | 20.65 |
4.2 Price Multiples
- AEP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AEP is more expensive than 67.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.3 |
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)2.96
PEG (5Y)3.66
EPS Next 2Y7.74%
EPS Next 3Y8.34%
5. AEP Dividend Analysis
5.1 Amount
- AEP has a Yearly Dividend Yield of 2.88%. Purely for dividend investing, there may be better candidates out there.
- AEP's Dividend Yield is comparable with the industry average which is at 2.87.
- AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
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 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
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.
- The dividend of AEP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP56.09%
EPS Next 2Y7.74%
EPS Next 3Y8.34%
AEP Fundamentals: All Metrics, Ratios and Statistics
132.31
+0.45 (+0.34%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)02-12 2026-02-12/bmo
Earnings (Next)05-04 2026-05-04/bmo
Inst Owners84.54%
Inst Owner Change-0.16%
Ins Owners0.02%
Ins Owner Change13.13%
Market Cap71.56B
Revenue(TTM)21.88B
Net Income(TTM)3.58B
Analysts73.57
Price Target135.6 (2.49%)
Short Float %3.5%
Short Ratio5.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
Yearly Dividend3.74
Dividend Growth(5Y)5.4%
DP56.09%
Div Incr Years15
Div Non Decr Years20
Ex-Date02-10 2026-02-10 (0.95)
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)-0.2%
EPS NQ rev (3m)1%
EPS NY rev (1m)0.34%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-0.07%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.2 | ||
| Fwd PE | 20.65 | ||
| P/S | 3.27 | ||
| P/FCF | N/A | ||
| P/OCF | 10.31 | ||
| P/B | 2.3 | ||
| P/tB | 2.3 | ||
| EV/EBITDA | 13.3 |
EPS(TTM)5.96
EY4.5%
EPS(NY)6.41
Fwd EY4.84%
FCF(TTM)-3.03
FCFYN/A
OCF(TTM)12.84
OCFY9.7%
SpS40.45
BVpS57.64
TBVpS57.54
PEG (NY)2.96
PEG (5Y)3.66
Graham Number87.92
Profitability
| Industry Rank | Sector 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 Rank | Sector 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
WACC6.54%
ROIC/WACC0.63
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 Year7.48%
Revenue Next 2Y6.08%
Revenue Next 3Y6.27%
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 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.