Taking everything into account, AES scores 4 out of 10 in our fundamental rating. AES was compared to 20 industry peers in the Independent Power and Renewable Electricity Producers industry. While AES is still in line with the averages on profitability rating, there are concerns on its financial health. AES has a decent growth rate and is not valued too expensively. AES also has an excellent dividend rating.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year AES was profitable.
In the past year AES had a positive cash flow from operations.
In multiple years AES reported negative net income over the last 5 years.
In the past 5 years AES always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of AES (2.23%) is better than 80.00% of its industry peers.
AES's Return On Equity of 29.37% is amongst the best of the industry. AES outperforms 95.00% of its industry peers.
AES has a Return On Invested Capital of 3.43%. This is in the better half of the industry: AES outperforms 75.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AES is in line with the industry average of 4.09%.

		Industry Rank	Sector Rank
ROA	2.23%
ROE	29.37%
ROIC	3.43%

ROA(3y)0.89%

ROA(5y)0.31%

ROE(3y)11.23%

ROE(5y)4.16%

ROIC(3y)5.05%

ROIC(5y)6.06%

1.3 Margins

Looking at the Profit Margin, with a value of 9.38%, AES is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
AES's Profit Margin has improved in the last couple of years.
AES has a better Operating Margin (14.83%) than 70.00% of its industry peers.
AES's Operating Margin has declined in the last couple of years.
AES has a worse Gross Margin (17.26%) than 80.00% of its industry peers.
AES's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	14.83%
PM (TTM)	9.38%
GM	17.26%

OM growth 3Y-13.97%

OM growth 5Y-4.63%

PM growth 3YN/A

PM growth 5Y35.68%

GM growth 3Y-8.16%

GM growth 5Y-3.95%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AES is destroying value.
The number of shares outstanding for AES has been increased compared to 1 year ago.
AES has more shares outstanding than it did 5 years ago.
The debt/assets ratio for AES is higher compared to a year ago.

2.2 Solvency

AES has an Altman-Z score of 0.44. This is a bad value and indicates that AES is not financially healthy and even has some risk of bankruptcy.
AES's Altman-Z score of 0.44 is in line compared to the rest of the industry. AES outperforms 55.00% of its industry peers.
AES has a Debt/Equity ratio of 6.85. This is a high value indicating a heavy dependency on external financing.
AES has a Debt to Equity ratio of 6.85. This is amonst the worse of the industry: AES underperforms 85.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	6.85
Debt/FCF	N/A
Altman-Z	0.44

ROIC/WACC0.54

WACC6.39%

2.3 Liquidity

A Current Ratio of 0.72 indicates that AES may have some problems paying its short term obligations.
The Current ratio of AES (0.72) is worse than 75.00% of its industry peers.
A Quick Ratio of 0.66 indicates that AES may have some problems paying its short term obligations.
AES has a Quick ratio of 0.66. This is in the lower half of the industry: AES underperforms 75.00% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.72
Quick Ratio	0.66

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

AES shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.78%.
AES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.23% yearly.
AES shows a decrease in Revenue. In the last year, the revenue decreased by -1.55%.
The Revenue has been growing slightly by 3.80% on average over the past years.

EPS 1Y (TTM)-10.78%

EPS 3Y11.42%

EPS 5Y9.23%

EPS Q2Q%5.63%

Revenue 1Y (TTM)-1.55%

Revenue growth 3Y3.29%

Revenue growth 5Y3.8%

Sales Q2Q%1.89%

3.2 Future

AES is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.68% yearly.
The Revenue is expected to grow by 8.94% on average over the next years. This is quite good.

EPS Next Y2.23%

EPS Next 2Y4.6%

EPS Next 3Y3.8%

EPS Next 5Y5.68%

Revenue Next Year-2.73%

Revenue Next 2Y0.69%

Revenue Next 3Y1.86%

Revenue Next 5Y8.94%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 7.12, the valuation of AES can be described as very cheap.
AES's Price/Earnings ratio is rather cheap when compared to the industry. AES is cheaper than 95.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.32. AES is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 6.32, the valuation of AES can be described as very cheap.
Based on the Price/Forward Earnings ratio, AES is valued cheaply inside the industry as 95.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of AES to the average of the S&P500 Index (25.57), we can say AES is valued rather cheaply.

		Industry Rank	Sector Rank
PE	7.12
Fwd PE	6.32

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, AES is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	12.4

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AES does not grow enough to justify the current Price/Earnings ratio.

PEG (NY)3.2

PEG (5Y)0.77

EPS Next 2Y4.6%

EPS Next 3Y3.8%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 4.68%, AES is a good candidate for dividend investing.
AES's Dividend Yield is rather good when compared to the industry average which is at 1.34. AES pays more dividend than 90.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.83, AES pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	4.68%

5.2 History

The dividend of AES has a limited annual growth rate of 5.08%.
AES has paid a dividend for at least 10 years, which is a reliable track record.
AES has not decreased their dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)5.08%

Div Incr Years12

Div Non Decr Years12

5.3 Sustainability

AES pays out 43.88% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of AES is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.

DP43.88%

EPS Next 2Y4.6%

EPS Next 3Y3.8%

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AES CORP / AES FAQ

What is the ChartMill fundamental rating of AES CORP (AES) stock?

ChartMill assigns a fundamental rating of 4 / 10 to AES.

What is the valuation status for AES stock?

ChartMill assigns a valuation rating of 5 / 10 to AES CORP (AES). This can be considered as Fairly Valued.

What is the profitability of AES stock?

AES CORP (AES) has a profitability rating of 5 / 10.

What is the financial health of AES CORP (AES) stock?

The financial health rating of AES CORP (AES) is 0 / 10.

Is the dividend of AES CORP sustainable?

The dividend rating of AES CORP (AES) is 8 / 10 and the dividend payout ratio is 43.88%.