3 months Premium FREE
No credit card. No commitment.
American Electric Power Co Inc
🇺🇸 AEP · NYSE/NASDAQ · US0255371017
Utilities
USD 136.78 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
20.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 136.78 ÷ 6.81 = 20.1
TTM period through: 2026-03-31
Forward P/E (estimated): 21.5
Based on analyst estimates
Reference: Provider P/E (Trailing): 20.5
Net Debt/EBITDA (TTM)
5.9x
Latest quarter: 24.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 24.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
ROE
12.6%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
13.4x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Dividend Summary
Powered by EODHDDividend Yield (Fwd)
2.78%
TTM: 2.78%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Forward Yield (estimated): 2.78%
Trailing Yield (TTM, last 12 months): 2.78%
Payout Ratio (Fwd)
55.8%
TTM: 55.5%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (Fwd): 55.8%
Payout (TTM): 55.5%
Cash Flow Payout (TTM): 28.9%
FCF Coverage (TTM): 3.78x
Growth Streak
8 yrs
Consec. increases
Div. Growth (5Y)
5.7%
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 08 May 2027 | — | USD | 0.95 |
| Forecast* | Quarterly | — | 10 Feb 2027 | — | USD | 0.95 |
| Forecast* | Quarterly | — | 10 Nov 2026 | — | USD | 0.95 |
| Forecast* | Quarterly | — | 08 Aug 2026 | — | USD | 0.93 |
| Paid | Quarterly | 28 Apr 2026 | 08 May 2026 | 10 Jun 2026 | USD | 0.95 |
| Paid | Quarterly | 20 Jan 2026 | 10 Feb 2026 | 10 Mar 2026 | USD | 0.95 |
| Paid | Quarterly | 22 Oct 2025 | 10 Nov 2025 | 10 Dec 2025 | USD | 0.95 |
| Paid | Quarterly | 22 Jul 2025 | 08 Aug 2025 | 10 Sep 2025 | USD | 0.93 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
American Electric Power is a premier regulated utility benefiting from a durable natural monopoly and massive long-term growth tailwinds from data center electrification. Trading at $136.78 versus our P/FFO fair value estimate of $142-213, it presents an attractive entry point for investors seeking essential infrastructure exposure. Worth considering for new positions, as the highly secure dividend (29% cash flow payout) provides reliable income while waiting for price appreciation.
Sector Context
American Electric Power is a major regulated electric utility that generates, transmits, and distributes electricity to millions of customers across the United States. In the utility sector, heavy capital expenditure and elevated debt are standard due to the massive physical infrastructure required, making P/FFO a more accurate valuation metric than GAAP P/E.
Temporary Opportunity Identified
High borrowing costs from the Fed's 'higher-for-longer' rate stance and near-term dilution from a $2.6 billion equity offering are weighing on the stock price, masking strong core growth.
📊 Strategy Analysis
- • Trading at $136.78, below the P/FFO fair value estimate range of $142-213, with an attractive P/FFO multiple of 11.5x representing excellent value for a premium utility.
- • Exceptionally safe dividend profile with a cash flow payout ratio of just 28.9% and an 8-year streak of consecutive increases at a 5.7% 5-year CAGR.
- • Major long-term growth catalyst from a $4.2 billion infrastructure investment to support massive AI and data center grid expansion in Appalachian Ohio.
- • High-quality regulated electric monopoly offering essential services, demonstrated by expanding profitability (EBITDA margin of 39.2%).
⚠ What to Watch
- • Net Debt/EBITDA of 5.89x is elevated, requiring a recent $2.6 billion equity dilution to fund capital expenditures and increasing sensitivity to higher-for-longer interest rates.
- • Carries long-term structural exposure to $1.31 billion in Asset Retirement Obligations (AROs) for legacy coal ash remediation, alongside heightened Texas wildfire regulatory mandates.
- • Current trailing dividend yield of 2.78% sits fractionally below the strict 3.0% minimum threshold typically targeted by conservative dividend strategies.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-07-04
Disclaimer: This information is for educational purposes only. Not financial advice.