AMERICAN ELECTRIC POWER (AEP) Fundamental Analysis & Valuation

NASDAQ:AEP • US0255371017

Current stock price

133.61 USD
+1.39 (+1.05%)
At close:
133.61 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

  • 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.
  • AEP had a positive operating cash flow in each of the past 5 years.
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 67.39% of the companies in the same industry.
  • 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.
  • The Return On Invested Capital of AEP (4.14%) is comparable to the rest of the industry.
  • The Average Return On Invested Capital over the past 3 years for AEP is in line with the industry average of 4.49%.
  • 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

  • With an excellent Profit Margin value of 16.36%, AEP belongs to the best of the industry, outperforming 84.78% of the companies in the same industry.
  • 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 67.39% of the companies in the same industry.
  • 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.
  • AEP's Gross Margin has declined in the last couple of years.
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

  • 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
  • The number of shares outstanding for AEP has been increased compared to 5 years ago.
  • 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 0.97, we must say that AEP is in the distress zone and has some risk of bankruptcy.
  • The Altman-Z score of AEP (0.97) is better 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 RankSector Rank
Debt/Equity 1.46
Debt/FCF N/A
Altman-Z 0.97
ROIC/WACC0.62
WACC6.65%
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 has a worse Current ratio (0.45) than 93.48% 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 worse Quick ratio (0.33) than 91.30% 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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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.
  • Looking at the last year, AEP shows a quite strong growth in Revenue. The Revenue has grown by 10.93% in the last year.
  • 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

  • The Earnings Per Share is expected to grow by 8.61% on average over the next years. This is quite good.
  • 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 Year7.48%
Revenue Next 2Y6.08%
Revenue Next 3Y6.27%
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.
  • 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.
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

  • Based on the Price/Earnings ratio of 22.42, the valuation of AEP can be described as rather expensive.
  • Based on the Price/Earnings ratio, AEP is valued a bit more expensive than the industry average as 69.57% of the companies are valued more cheaply.
  • AEP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.70, which is the current average of the S&P500 Index.
  • AEP is valuated rather expensively with a Price/Forward Earnings ratio of 20.85.
  • 65.22% of the companies in the same industry are cheaper than AEP, based on the Price/Forward Earnings ratio.
  • AEP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.84, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 22.42
Fwd PE 20.85
AEP Price Earnings VS Forward Price EarningsAEP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, AEP is valued a bit more expensive than 65.22% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 13.32
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)2.98
PEG (5Y)3.7
EPS Next 2Y7.74%
EPS Next 3Y8.34%

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7

5. AEP Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.87%, AEP has a reasonable but not impressive dividend return.
  • Compared to an average industry Dividend Yield of 2.92, 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 2.87%

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

  • AEP pays out 56.09% of its income as dividend. 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 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 (3/13/2026, 8:08:54 PM)

After market: 133.61 0 (0%)

133.61

+1.39 (+1.05%)

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 Cap72.26B
Revenue(TTM)21.88B
Net Income(TTM)3.58B
Analysts73.57
Price Target135.6 (1.49%)
Short Float %3.5%
Short Ratio5.39
Dividend
Industry RankSector Rank
Dividend Yield 2.87%
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)-0.2%
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 RankSector Rank
PE 22.42
Fwd PE 20.85
P/S 3.3
P/FCF N/A
P/OCF 10.41
P/B 2.32
P/tB 2.32
EV/EBITDA 13.32
EPS(TTM)5.96
EY4.46%
EPS(NY)6.41
Fwd EY4.8%
FCF(TTM)-3.03
FCFYN/A
OCF(TTM)12.84
OCFY9.61%
SpS40.45
BVpS57.64
TBVpS57.54
PEG (NY)2.98
PEG (5Y)3.7
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
WACC6.65%
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 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 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.