QualityDipStocks / Utilities · Electric utilities
American Electric Power Company AEP
Outside our quality screen, so we don’t track its dips. It’s 6% below its 52-week high.
Outside our quality screen, trading well above our fair value estimate.
- Fair value est.
- $78.03−40%
- Market Value
- forming
- Off 52-wk high
- −6%
- Risk vs market
- Lowbeta −0.07
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $130.21
- Fair value est.base case$78.03−40.1%
- 52-wk lowlowest close, 1 year$113.70−12.7%
- PriceFri Oct 30 close$130.21you are here
- 52-wk highhighest close, 1 year$138.69+6.5%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.7% ±2 points. Bear = 10.5% and 1.7%; bull = 8.5% and 5.7% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is above even the bull case.
What the price implies To be worth today’s price, AEP’s free cash flow would need to grow about 13% a year for five years; our estimate uses 4%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much AEP moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 1.4× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- -0.07
- Volatility
- 18% vs 13% SPY
- Correlation SPY
- −0.05
- Correlation QQQ
- −0.16
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ProfitabilityOperating margin widened to 24.3% in FY2025 from 18.7% in FY2023 (SEC filings).
ValuationFree-cash-flow yield of 4.8% (price / FCF 21.0×): $3.4B of free cash in the last 12 months.
GrowthDiluted EPS grew 19% to $6.66 in FY2025.
Cash returnsDividend yield of 2.9% ($2.1B paid over 12 months, 62% of earnings).
GrowthSales grew 11% to $23.6B over the last 12 months vs the 12 months before (SEC filings).
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $78.03, 40% below the price.
Balance sheetNet debt of $52.8B, 74% of the market cap (Sep 30, 2026).
Balance sheetOperating income covers interest only 2.4× over the last 12 months.
Cash returnsFree cash flow fell 29% over the last 12 months vs the 12 months before.
QualityDoesn’t pass our quality screen: ROE under 12% and ROIC under 10%; net debt 5.6× EBITDA (limit 3×).
Who’s talking about it
Notable investors, executives, analysts and public figures on American Electric Power Company in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Electric utilities
All fundamentals
P/E 21.2 · FCF yield 4.8% · ROE 11%
Valuation
- P/E
- 21.2×Utilities median 21.2×
- Price / FCF
- 21.0×
- FCF yield
- 4.8%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 3.02×
- Price / book
- 2.17×
- Market cap
- $71.2Bprice × diluted shares
- Enterprise value
- $124B
Growth
- Revenue, 12 months
- $23.6B
- Sales growth, 12 months
- +11.1%vs the 12 months before
- Sales growth, 3 yrs
- +3.7%/yrfrom FY2022
- Diluted EPS, 12 months
- $6.12
- EPS growth, last FY
- +19.4%
- Net income, 12 months
- $3.4B
- Net income growth
- −8%12 months vs before
Profitability
- Gross margin
- n/agross profit isn't reported (common for service and financial companies)
- Operating margin
- 23.4%
- Net margin
- 14.2%
- FCF margin
- 14.4%
- Return on equity
- 11%
- Return on invested capital
- 6%
Balance sheet
- Cash & short-term inv.
- $670M
- Total debt
- $53.5B
- Net cash
- −$52.8B
- Debt / equity
- 1.63×
- Interest coverage
- 2.4×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $3.4B
- FCF growth, 12 months
- −29%
- Dividend yield
- 2.90%$2.1B paid
- Payout ratio
- 62%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- +2.3%diluted shares vs a year ago
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From American Electric Power Company’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $78.03
Assumes 3.7% growth for 5 years (revenue grew 3.7% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $4.74 a share (trailing 12 months to Mar 31, 2026), from the 10-Q filed May 5, 2026. Net debt $51.2B, not deducted.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Momentum & 52-week range
RSI 63 · 5 days +0.4%
The business
FCF $-8.3B · Sales +14%
- Free cash flow, 12 months−$8.3B
- Free-cash-flow yield−11.8%
- Free-cash-flow margin−35%
- Gross margin61%
- Operating margin24%
- Return on invested capital5%
- Return on equity11%
- Sales growth (latest quarter vs year-ago quarter)+14%
- Net debt / EBITDA5.6×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
AEP is outside our quality screen
One text when a published rule fires on one of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.