AMERICAN ELECTRIC POWER (AEP) Stock Fundamental Analysis
USA - NASDAQ:AEP - US0255371017 - Common Stock
119.76 USD
-0.54 (-0.45%)
119.76 USD
0 (0%)
Taking everything into account, AEP scores 4 out of 10 in our fundamental rating. AEP was compared to 47 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.
1. Profitability
1.1 Basic Checks
AEP had positive earnings in the past year.
AEP had a positive operating cash flow in the past year.
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
The Return On Assets of AEP (3.32%) is better than 72.34% of its industry peers.
AEP has a better Return On Equity (12.03%) than 68.09% 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 48.94% 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 4.90%.
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's Profit Margin of 17.23% is amongst the best of the industry. AEP outperforms 89.36% of its industry peers.
In the last couple of years the Profit Margin of AEP has grown nicely.
Looking at the Operating Margin, with a value of 24.93%, AEP is in the better half of the industry, outperforming 68.09% of the companies in the same industry.
In the last couple of years the Operating Margin of AEP has grown nicely.
The Gross Margin of AEP (68.45%) is better than 61.70% of its industry peers.
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.
The number of shares outstanding for AEP has been increased compared to 1 year ago.
Compared to 5 years ago, AEP has more shares outstanding
Compared to 1 year ago, AEP has an improved debt to assets ratio.
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.
AEP has a Altman-Z score (1.00) which is in line with its industry peers.
A Debt/Equity ratio of 1.49 is on the high side and indicates that AEP has dependencies on debt financing.
With a Debt to Equity ratio value of 1.49, AEP perfoms like the industry average, outperforming 44.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.63
WACC6.51%
2.3 Liquidity
A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
AEP has a Current ratio of 0.69. This is in the lower half of the industry: AEP underperforms 70.21% 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 65.96% 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%.
Measured over the past 5 years, AEP shows a small growth in Earnings Per Share. The EPS has been growing by 5.71% on average per year.
Looking at the last year, AEP shows a quite strong growth in Revenue. The Revenue has grown by 8.44% in the last year.
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 7.56% on average over the next years.
AEP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.82% yearly.
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
The Price/Earnings ratio is 19.93, which indicates a rather expensive current valuation of AEP.
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 26.13, which is the current average of the S&P500 Index.
AEP is valuated rather expensively with a Price/Forward Earnings ratio of 18.79.
Based on the Price/Forward Earnings ratio, AEP is valued a bit more expensive than the industry average as 61.70% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of AEP to the average of the S&P500 Index (22.35), we can say AEP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.93 | ||
| Fwd PE | 18.79 |
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 | 12.38 |
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)3.1
PEG (5Y)3.49
EPS Next 2Y6.59%
EPS Next 3Y6.97%
5. Dividend
5.1 Amount
AEP has a Yearly Dividend Yield of 3.16%.
AEP's Dividend Yield is comparable with the industry average which is at 3.22.
AEP's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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 2Y6.59%
EPS Next 3Y6.97%
119.76
-0.54 (-0.45%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners85.1%
Inst Owner Change-0.68%
Ins Owners0.02%
Ins Owner Change6.33%
Market Cap64.05B
Revenue(TTM)21.26B
Net Income(TTM)3.66B
Analysts70.37
Price Target124.06 (3.59%)
Short Float %4.23%
Short Ratio7.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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)6.18%
PT rev (3m)10.58%
EPS NQ rev (1m)5.93%
EPS NQ rev (3m)-4.37%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.6%
Revenue NQ rev (1m)-0.93%
Revenue NQ rev (3m)-2.55%
Revenue NY rev (1m)-1.09%
Revenue NY rev (3m)-0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.93 | ||
| Fwd PE | 18.79 | ||
| P/S | 3.01 | ||
| P/FCF | N/A | ||
| P/OCF | 9.34 | ||
| P/B | 2.1 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 12.38 |
EPS(TTM)6.01
EY5.02%
EPS(NY)6.37
Fwd EY5.32%
FCF(TTM)-3.25
FCFYN/A
OCF(TTM)12.82
OCFY10.71%
SpS39.75
BVpS56.94
TBVpS56.84
PEG (NY)3.1
PEG (5Y)3.49
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
WACC6.51%
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.