Reviewing American Electric Power (AEP) and Its Rivals

American Electric Power (NASDAQ: AEP) is one of 79 public companies in the “Electric services” industry, but how does it contrast to its rivals? We will compare American Electric Power to related businesses based on the strength of its risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Profitability

This table compares American Electric Power and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Electric Power 12.56% 10.24% 2.69%
American Electric Power Competitors 3.28% 6.04% 1.64%

Analyst Recommendations

This is a breakdown of recent recommendations for American Electric Power and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 0 0 0 N/A
American Electric Power Competitors 947 3930 3199 129 2.31

As a group, “Electric services” companies have a potential upside of 6.54%. Given American Electric Power’s rivals higher possible upside, analysts plainly believe American Electric Power has less favorable growth aspects than its rivals.

Insider & Institutional Ownership

73.2% of American Electric Power shares are held by institutional investors. Comparatively, 64.4% of shares of all “Electric services” companies are held by institutional investors. 0.2% of American Electric Power shares are held by company insiders. Comparatively, 2.3% of shares of all “Electric services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares American Electric Power and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
American Electric Power $15.56 billion $1.92 billion 21.58
American Electric Power Competitors $8.17 billion $680.69 million 11.56

American Electric Power has higher revenue and earnings than its rivals. American Electric Power is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

American Electric Power has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, American Electric Power’s rivals have a beta of 0.31, suggesting that their average stock price is 69% less volatile than the S&P 500.

Dividends

American Electric Power pays an annual dividend of $2.80 per share and has a dividend yield of 3.1%. American Electric Power pays out 66.0% of its earnings in the form of a dividend. As a group, “Electric services” companies pay a dividend yield of 3.4% and pay out 73.9% of their earnings in the form of a dividend. American Electric Power has raised its dividend for 7 consecutive years.

Summary

American Electric Power beats its rivals on 9 of the 12 factors compared.

American Electric Power Company Profile

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. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, nuclear, and hydroelectric, as well as solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. The company owns, leases, or controls approximately 4,004 railcars, 468 barges, 8 towboats, and a coal handling terminal with approximately 18 million tons of annual capacity. American Electric Power Company, Inc. was founded in 1906 and is headquartered in Columbus, Ohio.

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