NYSE:AEP

Stock Analysis Report

American Electric Power Company

Executive Summary

American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States.

Snowflake

Fundamentals

Established dividend payer and overvalued.


Similar Companies

Share Price & News

How has American Electric Power Company's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

NYSE:AEP

-0.3%

US Electric Utilities

-1.0%

US Market


1 Year Return

24.5%

NYSE:AEP

11.9%

US Electric Utilities

-0.4%

US Market

AEP outperformed the Electric Utilities industry which returned 11.7% over the past year.

AEP outperformed the Market in United States of America which returned -1.7% over the past year.


Share holder returns

AEPIndustryMarket
7 Day0.3%-0.3%-1.0%
30 Day-0.9%0.6%-3.3%
90 Day5.1%4.8%0.4%
1 Year28.6%24.5%15.7%11.9%1.8%-0.4%
3 Year50.9%35.9%34.2%20.7%39.4%30.4%
5 Year104.9%71.7%74.6%44.7%54.2%37.1%

Price Volatility Vs. Market

How volatile is American Electric Power Company's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Electric Power Company undervalued based on future cash flows and its price relative to the stock market?

22.53x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

American Electric Power Company's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

American Electric Power Company's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

American Electric Power Company is good value based on earnings compared to the US Electric Utilities industry average.

American Electric Power Company is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

American Electric Power Company is poor value based on expected growth next year.


Price Based on Value of Assets

American Electric Power Company is overvalued based on assets compared to the US Electric Utilities industry average.


Next Steps

Future Growth

How is American Electric Power Company expected to perform in the next 1 to 3 years based on estimates from 10 analysts?

7.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

American Electric Power Company's revenue is expected to grow by 3.8% yearly, however this is not considered high growth (20% yearly).

American Electric Power Company's earnings are expected to grow by 7.3% yearly, however this is not considered high growth (20% yearly).

American Electric Power Company's revenue growth is positive but not above the United States of America market average.

American Electric Power Company's earnings growth is positive but not above the United States of America market average.

American Electric Power Company's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

American Electric Power Company is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has American Electric Power Company performed over the past 5 years?

3.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

American Electric Power Company's year on year earnings growth rate has been positive over the past 5 years.

American Electric Power Company's 1-year earnings growth is less than its 5-year average (2.4% vs 3.6%)

American Electric Power Company's earnings growth has not exceeded the US Electric Utilities industry average in the past year (2.4% vs 4.2%).


Return on Equity

American Electric Power Company has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

American Electric Power Company used its assets less efficiently than the US Electric Utilities industry average last year based on Return on Assets.


Return on Capital Employed

American Electric Power Company's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is American Electric Power Company's financial position?


Financial Position Analysis

American Electric Power Company's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

American Electric Power Company's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

American Electric Power Company's level of debt (142.2%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (114.9% vs 142.2% today).

Debt is not well covered by operating cash flow (18.1%, less than 20% of total debt).

Interest payments on debt are not well covered by earnings (EBIT is 2.7x annual interest expense, ideally 3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.1x debt.


Next Steps

Dividend

What is American Electric Power Company's current dividend yield, its reliability and sustainability?

3.17%

Expected Dividend Yield


Dividend Yield and Payments Analysis

American Electric Power Company's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.5%).

American Electric Power Company's dividend is below the markets top 25% of dividend payers in United States of America (3.9%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.5x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.6x coverage).


Next Steps

Management

What is the CEO of American Electric Power Company's salary, the management and board of directors tenure and is there insider trading?

7.8yrs

Average management tenure


CEO

Nick Akins (59yo)

7.8yrs

Tenure

US$12,202,028

Compensation

Mr. Nicholas K. Akins, also known as Nick, has been the Chief Executive Officer of American Electric Power Company, Inc. since November 12, 2011 and has been its President since January 1, 2011. Mr. Akins  ...


CEO Compensation Analysis

Nick's remuneration is about average for companies of similar size in United States of America.

Nick's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

7.8yrs

Average Tenure

56yo

Average Age

The average tenure for the American Electric Power Company management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

8.3yrs

Average Tenure

65yo

Average Age

The tenure for the American Electric Power Company board of directors is about average.


Insider Trading

American Electric Power Company individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$400,01630 Jul 19
Brian Tierney
EntityIndividual
Role
Executive VP & CFO
Shares4,458
Max PriceUS$89.73
SellUS$156,64406 Jun 19
Lisa Barton
EntityIndividual
Role
Executive Vice President of Utilities
Shares1,752
Max PriceUS$89.41
SellUS$112,74223 May 19
Paul Chodak
EntityIndividual
Shares1,303
Max PriceUS$86.53
SellUS$388,75816 May 19
David Feinberg
EntityIndividual
Role
Executive VP
Shares4,535
Max PriceUS$85.72
SellUS$377,80015 May 19
Brian Tierney
EntityIndividual
Role
Executive VP & CFO
Shares4,392
Max PriceUS$86.02
SellUS$128,96915 May 19
Mark McCullough
EntityIndividual
Shares1,503
Max PriceUS$85.81
SellUS$68,31921 Nov 18
Lisa Barton
EntityIndividual
Role
Executive Vice President of Utilities
Shares881
Max PriceUS$77.55
SellUS$64,77016 Nov 18
Paul Chodak
EntityIndividual
Shares847
Max PriceUS$76.47

Ownership Breakdown


Management Team

  • Brian Tierney (51yo)

    Executive VP & CFO

    • Tenure: 9.8yrs
    • Compensation: $3.67m
  • David Feinberg (49yo)

    Executive VP

    • Tenure: 7.6yrs
    • Compensation: $2.74m
  • Bette Rozsa

    Managing Director of Investor Relations

  • Nick Akins (59yo)

    Chairman

    • Tenure: 7.8yrs
    • Compensation: $12.20m
  • Lana Hillebrand (59yo)

    Executive VP & Chief Administrative Officer

    • Tenure: 6.7yrs
    • Compensation: $2.28m
  • Lisa Barton (53yo)

    Executive Vice President of Utilities

    • Tenure: 8.0yrs
    • Compensation: $2.41m
  • Dale Heydlauff (62yo)

    Senior Vice President of Corporate Communications

    • Tenure: 2.6yrs
  • Gina Mazzei-Smith (52yo)

    Chief Compliance Officer

  • Joseph Buonaiuto

    Senior VP

  • Tracy Elich (62yo)

    Vice President of Human Resources

    • Tenure: 7.8yrs

Board Members

  • Sandy Lin (61yo)

    Director

    • Tenure: 7.1yrs
    • Compensation: $280.09k
  • Nick Akins (59yo)

    Chairman

    • Tenure: 5.6yrs
    • Compensation: $12.20m
  • Ralph Crosby (72yo)

    Director

    • Tenure: 13.6yrs
    • Compensation: $298.84k
  • Dave Anderson (70yo)

    Director

    • Tenure: 8.3yrs
    • Compensation: $293.84k
  • Lionel Nowell (64yo)

    Director

    • Tenure: 15.1yrs
    • Compensation: $303.84k
  • Linda Goodspeed (57yo)

    Director

    • Tenure: 13.8yrs
    • Compensation: $278.84k
  • Sara Martinez Tucker (64yo)

    Director

    • Tenure: 10.6yrs
    • Compensation: $278.84k
  • Steve Rasmussen (66yo)

    Director

    • Tenure: 6.9yrs
    • Compensation: $278.84k
  • Tom Hoaglin (70yo)

    Lead Director

    • Tenure: 7.3yrs
    • Compensation: $323.84k
  • Dick Notebaert (72yo)

    Director

    • Tenure: 8.3yrs
    • Compensation: $278.84k

Company Information

American Electric Power Company, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Electric Power Company, Inc.
  • Ticker: AEP
  • Exchange: NYSE
  • Founded: 1906
  • Industry: electric utilities
  • Sector: utilities
  • Market Cap: US$44.555b
  • Shares outstanding: 493.80m
  • Website: Click here

Number of Employees


Location

  • American Electric Power Company, Inc.
  • 1 Riverside Plaza
  • Columbus
  • Ohio
  • 43215
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AEPNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
AEPDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0HECLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
AEP *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968

Biography

American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/16 23:32
End of Day Share Price2019/08/16 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.