AMERICAN ELECTRIC POWER (AEP)
US0255371017 - Common Stock
Overall AEP gets a fundamental rating of 3 out of 10. We evaluated AEP against 46 industry peers in the Electric Utilities industry. There are concerns on the financial health of AEP while its profitability can be described as average. AEP is valied quite expensively at the moment, while 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.
AEP had a positive operating cash flow in the past year.
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.
1.2 Ratios
AEP has a Return On Assets of 2.64%. This is comparable to the rest of the industry: AEP outperforms 43.24% of its industry peers.
Looking at the Return On Equity, with a value of 9.89%, AEP is in the better half of the industry, outperforming 62.16% of the companies in the same industry.
With a Return On Invested Capital value of 3.50%, AEP is not doing good in the industry: 64.86% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for AEP is in line with the industry average of 4.61%.
The 3 year average ROIC (3.45%) for AEP is below the current ROIC(3.50%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.64% | ||
| ROE | 9.89% | ||
| ROIC | 3.5% |
ROA(3y)2.53%
ROA(5y)2.57%
ROE(3y)9.81%
ROE(5y)9.98%
ROIC(3y)3.45%
ROIC(5y)3.35%
1.3 Margins
Looking at the Profit Margin, with a value of 13.46%, AEP is in line with its industry, outperforming 48.65% of the companies in the same industry.
AEP's Profit Margin has been stable in the last couple of years.
The Operating Margin of AEP (20.61%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of AEP has grown nicely.
AEP's Gross Margin of 67.89% is in line compared to the rest of the industry. AEP outperforms 59.46% of its industry peers.
AEP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.61% | ||
| PM (TTM) | 13.46% | ||
| GM | 67.89% |
OM growth 3Y-0.59%
OM growth 5Y2.96%
PM growth 3Y-7.6%
PM growth 5Y-0.42%
GM growth 3Y-6.66%
GM growth 5Y-3.69%
2. Health
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.
Compared to 1 year ago, AEP has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.87, we must say that AEP is in the distress zone and has some risk of bankruptcy.
AEP's Altman-Z score of 0.87 is in line compared to the rest of the industry. AEP outperforms 54.05% of its industry peers.
AEP has a Debt/Equity ratio of 1.53. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AEP (1.53) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.87 |
ROIC/WACC0.54
WACC6.49%
2.3 Liquidity
A Current Ratio of 0.57 indicates that AEP may have some problems paying its short term obligations.
AEP has a Current ratio of 0.57. This is amonst the worse of the industry: AEP underperforms 81.08% of its industry peers.
A Quick Ratio of 0.41 indicates that AEP may have some problems paying its short term obligations.
With a Quick ratio value of 0.41, AEP is not doing good in the industry: 83.78% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.57 | ||
| Quick Ratio | 0.41 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.67% over the past year.
The Earnings Per Share has been growing slightly by 5.81% on average over the past years.
Looking at the last year, AEP shows a small growth in Revenue. The Revenue has grown by 1.63% in the last year.
The Revenue has been growing slightly by 3.23% on average over the past years.
EPS 1Y (TTM)10.67%
EPS 3Y5.68%
EPS 5Y5.81%
EPS Q2Q%4.52%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y8.36%
Revenue growth 5Y3.23%
Sales Q2Q%1.09%
3.2 Future
The Earnings Per Share is expected to grow by 6.31% on average over the next years.
The Revenue is expected to grow by 2.96% on average over the next years.
EPS Next Y8.38%
EPS Next 2Y6.45%
EPS Next 3Y6.61%
EPS Next 5Y6.31%
Revenue Next Year1.99%
Revenue Next 2Y3.3%
Revenue Next 3Y3.13%
Revenue Next 5Y2.96%
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 stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.70, the valuation of AEP can be described as correct.
The rest of the industry has a similar Price/Earnings ratio as AEP.
When comparing the Price/Earnings ratio of AEP to the average of the S&P500 Index (26.92), we can say AEP is valued slightly cheaper.
The Price/Forward Earnings ratio is 15.75, which indicates a correct valuation of AEP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AEP is on the same level as its industry peers.
AEP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.7 | ||
| Fwd PE | 15.75 |
4.2 Price Multiples
AEP's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.25 |
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.
PEG (NY)1.99
PEG (5Y)2.87
EPS Next 2Y6.45%
EPS Next 3Y6.61%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.05%, AEP is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.62, AEP pays a bit more dividend than its industry peers.
AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
5.2 History
The dividend of AEP has a limited annual growth rate of 5.83%.
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)5.83%
Div Incr Years15
Div Non Decr Years20
5.3 Sustainability
71.01% of the earnings are spent on dividend by AEP. This is not a sustainable payout ratio.
The dividend of AEP is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP71.01%
EPS Next 2Y6.45%
EPS Next 3Y6.61%
AMERICAN ELECTRIC POWER
NASDAQ:AEP (1/10/2025, 8:00:05 PM)
After market: 92.97 -0.54 (-0.58%)93.51
+1.25 (+1.35%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners79.36%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change9.83%
Market Cap49.80B
Analysts66.92
Price Target102.76 (9.89%)
Short Float %1.62%
Short Ratio3.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
Dividend Growth(5Y)5.83%
DP71.01%
Div Incr Years15
Div Non Decr Years20
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.02%
Min EPS beat(2)0.38%
Max EPS beat(2)1.65%
EPS beat(4)3
Avg EPS beat(4)-0.21%
Min EPS beat(4)-3.24%
Max EPS beat(4)1.65%
EPS beat(8)5
Avg EPS beat(8)0.68%
EPS beat(12)8
Avg EPS beat(12)1.08%
EPS beat(16)10
Avg EPS beat(16)1.22%
Revenue beat(2)0
Avg Revenue beat(2)-2.97%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)-1.62%
Revenue beat(4)0
Avg Revenue beat(4)-4.57%
Min Revenue beat(4)-11.43%
Max Revenue beat(4)-0.89%
Revenue beat(8)1
Avg Revenue beat(8)1.08%
Revenue beat(12)5
Avg Revenue beat(12)3.79%
Revenue beat(16)7
Avg Revenue beat(16)2.55%
PT rev (1m)-0.86%
PT rev (3m)0.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.16%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.93%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.7 | ||
| Fwd PE | 15.75 | ||
| P/S | 2.54 | ||
| P/FCF | N/A | ||
| P/OCF | 7.77 | ||
| P/B | 1.87 | ||
| P/tB | 1.87 | ||
| EV/EBITDA | 12.25 |
EPS(TTM)5.6
EY5.99%
EPS(NY)5.94
Fwd EY6.35%
FCF(TTM)-1
FCFYN/A
OCF(TTM)12.04
OCFY12.88%
SpS36.81
BVpS50.1
TBVpS50
PEG (NY)1.99
PEG (5Y)2.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.64% | ||
| ROE | 9.89% | ||
| ROCE | 4.52% | ||
| ROIC | 3.5% | ||
| ROICexc | 3.52% | ||
| ROICexgc | 3.52% | ||
| OM | 20.61% | ||
| PM (TTM) | 13.46% | ||
| GM | 67.89% | ||
| FCFM | N/A |
ROA(3y)2.53%
ROA(5y)2.57%
ROE(3y)9.81%
ROE(5y)9.98%
ROIC(3y)3.45%
ROIC(5y)3.35%
ROICexc(3y)3.47%
ROICexc(5y)3.37%
ROICexgc(3y)3.47%
ROICexgc(5y)3.37%
ROCE(3y)4.54%
ROCE(5y)4.4%
ROICexcg growth 3Y1.31%
ROICexcg growth 5Y-0.88%
ROICexc growth 3Y1.32%
ROICexc growth 5Y-0.88%
OM growth 3Y-0.59%
OM growth 5Y2.96%
PM growth 3Y-7.6%
PM growth 5Y-0.42%
GM growth 3Y-6.66%
GM growth 5Y-3.69%
F-Score5
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.53 | ||
| Cap/Depr | 207.99% | ||
| Cap/Sales | 35.43% | ||
| Interest Coverage | 1.96 | ||
| Cash Conversion | 86.91% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.57 | ||
| Quick Ratio | 0.41 | ||
| Altman-Z | 0.87 |
F-Score5
WACC6.49%
ROIC/WACC0.54
Cap/Depr(3y)213.22%
Cap/Depr(5y)220.73%
Cap/Sales(3y)36.12%
Cap/Sales(5y)38.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.67%
EPS 3Y5.68%
EPS 5Y5.81%
EPS Q2Q%4.52%
EPS Next Y8.38%
EPS Next 2Y6.45%
EPS Next 3Y6.61%
EPS Next 5Y6.31%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y8.36%
Revenue growth 5Y3.23%
Sales Q2Q%1.09%
Revenue Next Year1.99%
Revenue Next 2Y3.3%
Revenue Next 3Y3.13%
Revenue Next 5Y2.96%
EBIT growth 1Y8.35%
EBIT growth 3Y7.72%
EBIT growth 5Y6.28%
EBIT Next Year89.86%
EBIT Next 3Y30.98%
EBIT Next 5Y19.42%
FCF growth 1Y37.71%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y14.52%
OCF growth 3Y9.35%
OCF growth 5Y-0.82%