AMERICAN ELECTRIC POWER (AEP) Stock Fundamental Analysis

USA • Nasdaq • NASDAQ:AEP • US0255371017

120.67 USD
+2.34 (+1.98%)
At close: Feb 3, 2026
121.3 USD
+0.63 (+0.52%)
After Hours: 2/3/2026, 8:00:00 PM
Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to AEP. AEP was compared to 46 industry peers in the Electric Utilities industry. While AEP belongs to the best of the industry regarding profitability, there are concerns on its financial health. AEP is quite expensive at the moment. It does show a decent growth rate. Finally AEP also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

7

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.
  • In the past 5 years AEP has always been profitable.
  • In the past 5 years AEP always reported a positive cash flow from operatings.
AEP Yearly Net Income VS EBIT VS OCF VS FCFAEP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B 6B

1.2 Ratios

  • With a decent Return On Assets value of 3.32%, AEP is doing good in the industry, outperforming 73.91% of the companies in the same industry.
  • With a decent Return On Equity value of 12.03%, AEP is doing good in the industry, outperforming 63.04% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 4.13%, AEP is in line with its industry, outperforming 45.65% of the companies in the same industry.
  • 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 last Return On Invested Capital (4.13%) for AEP is above the 3 year average (3.55%), which is a sign of increasing profitability.
Industry RankSector 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%
AEP Yearly ROA, ROE, ROICAEP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8 10

1.3 Margins

  • With an excellent Profit Margin value of 17.23%, AEP belongs to the best of the industry, outperforming 86.96% of the companies in the same industry.
  • AEP's Profit Margin has improved in the last couple of years.
  • AEP has a Operating Margin of 24.93%. This is in the better half of the industry: AEP outperforms 67.39% of its industry peers.
  • AEP's Operating Margin has improved in the last couple of years.
  • AEP's Gross Margin of 68.45% is in line compared to the rest of the industry. AEP outperforms 58.70% of its industry peers.
  • In the last couple of years the Gross Margin of AEP has declined.
Industry RankSector 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%
AEP Yearly Profit, Operating, Gross MarginsAEP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

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1

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.
  • 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
  • AEP has a better debt/assets ratio than last year.
AEP Yearly Shares OutstandingAEP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
AEP Yearly Total Debt VS Total AssetsAEP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B 100B

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's Altman-Z score of 0.99 is fine compared to the rest 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.
  • AEP has a Debt to Equity ratio (1.49) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 1.49
Debt/FCF N/A
Altman-Z 0.99
ROIC/WACC0.62
WACC6.63%
AEP Yearly LT Debt VS Equity VS FCFAEP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10B 20B 30B

2.3 Liquidity

  • A Current Ratio of 0.69 indicates that AEP may have some problems paying its short term obligations.
  • AEP has a worse Current ratio (0.69) than 76.09% of its industry peers.
  • A Quick Ratio of 0.53 indicates that AEP may have some problems paying its short term obligations.
  • AEP's Quick ratio of 0.53 is on the low side compared to the rest of the industry. AEP is outperformed by 73.91% of its industry peers.
Industry RankSector Rank
Current Ratio 0.69
Quick Ratio 0.53
AEP Yearly Current Assets VS Current LiabilitesAEP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

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5

3. Growth

3.1 Past

  • The Earnings Per Share has been growing slightly by 7.32% over the past year.
  • 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

  • Based on estimates for the next years, AEP will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.09% on average per year.
  • 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

  • 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.
  • 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.
AEP Yearly Revenue VS EstimatesAEP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 10B 20B 30B
AEP Yearly EPS VS EstimatesAEP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 4 6 8

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2

4. Valuation

4.1 Price/Earnings Ratio

  • AEP is valuated rather expensively with a Price/Earnings ratio of 20.08.
  • AEP's Price/Earnings ratio is in line with the industry average.
  • The average S&P500 Price/Earnings ratio is at 28.18. AEP is valued slightly cheaper when compared to this.
  • The Price/Forward Earnings ratio is 18.90, which indicates a rather expensive current 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 is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.51, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 20.08
Fwd PE 18.9
AEP Price Earnings VS Forward Price EarningsAEP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, AEP is valued a bit more expensive than the industry average as 60.87% of the companies are valued more cheaply.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 12.26
AEP Per share dataAEP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40

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)3.09
PEG (5Y)3.52
EPS Next 2Y6.69%
EPS Next 3Y7.04%

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7

5. Dividend

5.1 Amount

  • With a Yearly Dividend Yield of 3.19%, AEP has a reasonable but not impressive dividend return.
  • AEP's Dividend Yield is comparable with the industry average which is at 2.90.
  • Compared to an average S&P500 Dividend Yield of 1.83, AEP pays a better dividend.
Industry RankSector 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
AEP Yearly Dividends per shareAEP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3

5.3 Sustainability

  • AEP pays out 54.46% 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.
DP54.46%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
AEP Yearly Income VS Free CF VS DividendAEP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B 2B -2B
AEP Dividend Payout.AEP Dividend Payout, showing the Payout Ratio.AEP Dividend Payout.PayoutRetained Earnings

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AMERICAN ELECTRIC POWER

NASDAQ:AEP (2/3/2026, 8:00:00 PM)

After market: 121.3 +0.63 (+0.52%)

120.67

+2.34 (+1.98%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)10-29
Earnings (Next)02-12
Inst Owners86.2%
Inst Owner Change-0.19%
Ins Owners0.02%
Ins Owner Change6.16%
Market Cap64.45B
Revenue(TTM)21.26B
Net Income(TTM)3.66B
Analysts72.86
Price Target131.17 (8.7%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.19%
Yearly Dividend3.6
Dividend Growth(5Y)5.62%
DP54.46%
Div Incr Years15
Div Non Decr Years20
Ex-Date02-10
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)-0.39%
PT rev (3m)5.74%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)2.94%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)-2.12%
Revenue NQ rev (3m)-1.36%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)1.49%
Valuation
Industry RankSector Rank
PE 20.08
Fwd PE 18.9
P/S 3.03
P/FCF N/A
P/OCF 9.4
P/B 2.12
P/tB 2.12
EV/EBITDA 12.26
EPS(TTM)6.01
EY4.98%
EPS(NY)6.39
Fwd EY5.29%
FCF(TTM)-3.25
FCFYN/A
OCF(TTM)12.84
OCFY10.64%
SpS39.8
BVpS57.01
TBVpS56.91
PEG (NY)3.09
PEG (5Y)3.52
Graham Number87.8
Profitability
Industry RankSector 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 RankSector 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 0.99
F-Score6
WACC6.63%
ROIC/WACC0.62
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 Y6.51%
EPS Next 2Y6.69%
EPS Next 3Y7.04%
EPS Next 5Y8.09%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y5.51%
Revenue growth 5Y4.85%
Sales Q2Q%11.3%
Revenue Next Year5.56%
Revenue Next 2Y6.52%
Revenue Next 3Y6.39%
Revenue Next 5Y7.46%
EBIT growth 1Y31.19%
EBIT growth 3Y9.11%
EBIT growth 5Y10.1%
EBIT Next Year83.65%
EBIT Next 3Y30.68%
EBIT Next 5Y22.53%
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.


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.