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. AEP scores excellent on profitability, but there are concerns on its financial health. AEP is valied quite expensively at the moment, while it does show a decent growth rate. AEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- AEP had positive earnings in the past year.
- 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
- AEP has a better Return On Assets (3.32%) than 73.91% of its industry peers.
- AEP has a better Return On Equity (12.03%) than 63.04% of its industry peers.
- AEP has a Return On Invested Capital of 4.13%. This is comparable to the rest of the industry: AEP outperforms 45.65% of its industry peers.
- 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.
- In the last couple of years the Profit Margin of AEP has grown nicely.
- AEP has a better Operating Margin (24.93%) than 67.39% of its industry peers.
- AEP's Operating Margin has improved in the last couple of years.
- The Gross Margin of AEP (68.45%) is comparable to the rest of the industry.
- AEP's Gross Margin has declined in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AEP is destroying value.
- Compared to 1 year ago, AEP has more shares outstanding
- AEP has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for AEP has been reduced compared to a year ago.
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 (1.49) which is in line with 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
- AEP has a Current 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.
- 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.
- AEP has a Quick ratio of 0.53. This is in the lower half of the industry: AEP underperforms 73.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- AEP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.32%.
- The Earnings Per Share has been growing slightly by 5.71% on average over the past years.
- Looking at the last year, AEP shows a quite strong growth in Revenue. The Revenue has grown by 8.44% in the last year.
- 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
- AEP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.09% yearly.
- 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
- Based on the Price/Earnings ratio of 19.93, the valuation of AEP can be described as rather expensive.
- AEP's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.32, AEP is valued a bit cheaper.
- 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.
- AEP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.93 | ||
| Fwd PE | 18.76 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AEP indicates a slightly more expensive valuation: AEP is more expensive than 60.87% of the companies listed 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 an expensive valuation of the company.
- The decent profitability rating of AEP 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.
- AEP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.
| 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 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)5.62%
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.
- The dividend of AEP is growing, but earnings are growing more, so the dividend growth is 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.