118.285 USD
-0.92 (-0.78%)
Last: Jan 30, 2026, 11:20 AM
Overall AEP gets a fundamental rating of 4 out of 10. We evaluated AEP against 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
- 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.
- AEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AEP's Return On Assets of 3.32% is fine compared to the rest of the industry. AEP outperforms 73.91% of its industry peers.
- Looking at the Return On Equity, with a value of 12.03%, AEP is in the better half of the industry, outperforming 63.04% of the companies in the same industry.
- AEP's Return On Invested Capital of 4.13% is in line compared to the rest of the industry. AEP outperforms 45.65% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital 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
- AEP has a better Profit Margin (17.23%) than 86.96% of its industry peers.
- AEP's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 24.93%, AEP is in the better half of the industry, outperforming 67.39% of the companies in the same industry.
- In the last couple of years the Operating Margin of AEP has grown nicely.
- Looking at the Gross Margin, with a value of 68.45%, AEP is in line with its industry, outperforming 58.70% of the companies in the same industry.
- In the last couple of years the Gross Margin of AEP has declined.
| 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
- AEP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- AEP has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for AEP has been increased compared to 5 years ago.
- AEP has a better debt/assets ratio than last year.
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.
- AEP has a Altman-Z score of 0.99. This is in the better half of the industry: AEP outperforms 65.22% of its industry peers.
- A Debt/Equity ratio of 1.49 is on the high side and indicates that AEP has dependencies on debt financing.
- The Debt to Equity ratio of AEP (1.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.99 |
ROIC/WACC0.63
WACC6.59%
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.
- The Current ratio of AEP (0.69) is worse than 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.
- The Quick ratio of AEP (0.53) is worse than 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.
- AEP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.44%.
- The Revenue has been growing slightly by 4.85% on average over the past years.
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
- The Earnings Per Share is expected to grow by 8.09% on average over the next years. This is quite good.
- The Revenue is expected to grow by 7.46% on average over the next years.
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
- 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- AEP is valuated rather expensively with a Price/Earnings ratio of 19.68.
- Compared to the rest of the industry, the Price/Earnings ratio of AEP is on the same level as its industry peers.
- AEP is valuated rather cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 18.52 indicates a rather expensive 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 25.72.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.68 | ||
| Fwd PE | 18.52 |
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 | 12.31 |
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)3.02
PEG (5Y)3.45
EPS Next 2Y6.69%
EPS Next 3Y7.04%
5. Dividend
5.1 Amount
- AEP has a Yearly Dividend Yield of 3.24%. 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.
- Compared to an average S&P500 Dividend Yield of 1.82, AEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
5.2 History
- The dividend of AEP has a limited annual growth rate of 5.62%.
- 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)5.62%
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.