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.
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.
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 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
- 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 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
- 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.
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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.97 |
ROIC/WACC0.62
WACC6.65%
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 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.
- 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.
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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.42 | ||
| Fwd PE | 20.85 |
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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.32 |
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%
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 Rank | Sector 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
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 Fundamentals: All Metrics, Ratios and Statistics
133.61
+1.39 (+1.05%)
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 Change13.7%
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 Rank | Sector 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 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 | 22.42 | ||
| 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 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
WACC6.65%
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.