AMERICAN ELECTRIC POWER (AEP) Stock Fundamental Analysis
USA - NASDAQ:AEP - US0255371017 - Common Stock
121.3 USD
-0.18 (-0.15%)
121.9 USD
+0.6 (+0.49%)
Taking everything into account, AEP scores 4 out of 10 in our fundamental rating. AEP was compared to 46 industry peers in the Electric Utilities industry. AEP has an excellent profitability rating, but there are concerns on its financial health. AEP is quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years AEP has always 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 70.83% of its industry peers.
AEP has a Return On Equity of 12.03%. This is in the better half of the industry: AEP outperforms 68.75% 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 43.75% 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 5.00%.
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 87.50% of its industry peers.
AEP's Profit Margin has improved in the last couple of years.
The Operating Margin of AEP (24.93%) is better than 66.67% of its industry peers.
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 the better half of the industry, outperforming 62.50% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AEP is destroying value.
AEP has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AEP has more shares outstanding
The debt/assets ratio for AEP has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that AEP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AEP (1.00) is comparable to the rest of the industry.
AEP has a Debt/Equity ratio of 1.49. This is a high value indicating a heavy dependency on external financing.
AEP has a Debt to Equity ratio of 1.49. This is comparable to the rest of the industry: AEP outperforms 41.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.63
WACC6.55%
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 has a Current ratio of 0.69. This is in the lower half of the industry: AEP underperforms 75.00% of its industry peers.
A Quick Ratio of 0.53 indicates that AEP may have some problems paying its short term obligations.
AEP has a Quick ratio of 0.53. This is in the lower half of the industry: AEP underperforms 72.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.32% over the past year.
AEP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.71% yearly.
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 a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.56% yearly.
The Revenue is expected to grow by 6.82% on average over the next years.
EPS Next Y6.43%
EPS Next 2Y6.59%
EPS Next 3Y6.97%
EPS Next 5Y7.56%
Revenue Next Year5.49%
Revenue Next 2Y6.24%
Revenue Next 3Y6.05%
Revenue Next 5Y6.82%
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
With a Price/Earnings ratio of 20.18, AEP is valued on the expensive side.
AEP's Price/Earnings ratio is a bit more expensive when compared to the industry. AEP is more expensive than 60.42% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.89. AEP is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 19.03, which indicates a rather expensive current valuation of AEP.
60.42% of the companies in the same industry are cheaper than AEP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 34.59. AEP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.18 | ||
| Fwd PE | 19.03 |
4.2 Price Multiples
60.42% of the companies in the same industry are cheaper than AEP, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.45 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AEP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.14
PEG (5Y)3.53
EPS Next 2Y6.59%
EPS Next 3Y6.97%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.13%.
AEP's Dividend Yield is comparable with the industry average which is at 3.77.
AEP's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.13% |
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 their dividend for at least 10 years, which is a reliable track record.
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.
AEP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP54.46%
EPS Next 2Y6.59%
EPS Next 3Y6.97%
121.3
-0.18 (-0.15%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners85.1%
Inst Owner Change-0.25%
Ins Owners0.02%
Ins Owner Change6.82%
Market Cap64.87B
Revenue(TTM)21.26B
Net Income(TTM)3.66B
Analysts70.37
Price Target124.06 (2.28%)
Short Float %4.23%
Short Ratio7.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.13% |
Yearly Dividend3.6
Dividend Growth(5Y)5.62%
DP54.46%
Div Incr Years15
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.92%
Min EPS beat(2)-1.41%
Max EPS beat(2)11.24%
EPS beat(4)2
Avg EPS beat(4)4.4%
Min EPS beat(4)-1.41%
Max EPS beat(4)11.24%
EPS beat(8)5
Avg EPS beat(8)2.09%
EPS beat(12)7
Avg EPS beat(12)1.92%
EPS beat(16)10
Avg EPS beat(16)1.91%
Revenue beat(2)2
Avg Revenue beat(2)2.56%
Min Revenue beat(2)1.47%
Max Revenue beat(2)3.65%
Revenue beat(4)3
Avg Revenue beat(4)1.14%
Min Revenue beat(4)-5.22%
Max Revenue beat(4)4.64%
Revenue beat(8)3
Avg Revenue beat(8)-1.72%
Revenue beat(12)4
Avg Revenue beat(12)1.1%
Revenue beat(16)8
Avg Revenue beat(16)3.12%
PT rev (1m)6.07%
PT rev (3m)6.83%
EPS NQ rev (1m)9.91%
EPS NQ rev (3m)10.53%
EPS NY rev (1m)0.28%
EPS NY rev (3m)0.82%
Revenue NQ rev (1m)4.4%
Revenue NQ rev (3m)-0.38%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.18 | ||
| Fwd PE | 19.03 | ||
| P/S | 3.05 | ||
| P/FCF | N/A | ||
| P/OCF | 9.46 | ||
| P/B | 2.13 | ||
| P/tB | 2.13 | ||
| EV/EBITDA | 12.45 |
EPS(TTM)6.01
EY4.95%
EPS(NY)6.37
Fwd EY5.25%
FCF(TTM)-3.25
FCFYN/A
OCF(TTM)12.82
OCFY10.57%
SpS39.75
BVpS56.94
TBVpS56.84
PEG (NY)3.14
PEG (5Y)3.53
Graham Number87.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 12.03% | ||
| ROCE | 5.29% | ||
| ROIC | 4.13% | ||
| ROICexc | 4.18% | ||
| ROICexgc | 4.18% | ||
| OM | 24.93% | ||
| PM (TTM) | 17.23% | ||
| GM | 68.45% | ||
| FCFM | N/A |
ROA(3y)2.54%
ROA(5y)2.64%
ROE(3y)9.79%
ROE(5y)10.22%
ROIC(3y)3.55%
ROIC(5y)3.47%
ROICexc(3y)3.57%
ROICexc(5y)3.49%
ROICexgc(3y)3.58%
ROICexgc(5y)3.5%
ROCE(3y)4.66%
ROCE(5y)4.55%
ROICexgc growth 3Y2.86%
ROICexgc growth 5Y3.59%
ROICexc growth 3Y2.86%
ROICexc growth 5Y3.6%
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%
F-Score6
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.16 | ||
| Cap/Depr | 245.73% | ||
| Cap/Sales | 40.43% | ||
| Interest Coverage | 2.78 | ||
| Cash Conversion | 77.96% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 1 |
F-Score6
WACC6.55%
ROIC/WACC0.63
Cap/Depr(3y)223.56%
Cap/Depr(5y)219.34%
Cap/Sales(3y)37.81%
Cap/Sales(5y)38.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)7.32%
EPS 3Y5.78%
EPS 5Y5.71%
EPS Q2Q%-2.7%
EPS Next Y6.43%
EPS Next 2Y6.59%
EPS Next 3Y6.97%
EPS Next 5Y7.56%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.3%
Revenue Next Year5.49%
Revenue Next 2Y6.24%
Revenue Next 3Y6.05%
Revenue Next 5Y6.82%
EBIT growth 1Y31.19%
EBIT growth 3Y9.11%
EBIT growth 5Y10.1%
EBIT Next Year85.93%
EBIT Next 3Y30.64%
EBIT Next 5Y22.43%
FCF growth 1Y50.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.11%
OCF growth 3Y21.01%
OCF growth 5Y9.77%
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.
What is the valuation status of AMERICAN ELECTRIC POWER (AEP) stock?
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.
How financially healthy is AMERICAN ELECTRIC POWER?
The financial health rating of AMERICAN ELECTRIC POWER (AEP) is 1 / 10.
What is the expected EPS growth for AMERICAN ELECTRIC POWER (AEP) stock?
The Earnings per Share (EPS) of AMERICAN ELECTRIC POWER (AEP) is expected to grow by 6.43% in the next year.