AEP
AMERICAN ELECTRIC POWER CO INC
Utilities • CIK: 0000004904
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Market Cap
$61.64B
P/E (TTM)
17.2x
Rev Growth (TTM)
+10.9%
Net Margin (TTM)
16.4%
FCF Yield (TTM)
11.3%
FCF Margin (TTM)
31.7%
Filing Intelligence
6.0/10
10-K filed Feb 12, 2026 • FY 2025
Executive Summary
AEP's earnings increased significantly year-over-year due to strategic investments in transmission, favorable regulatory outcomes, and operational efficiencies, despite some one-time charges.. The...
Key Concerns
- ●Capital Investment and Financing Risk (high)
- ●Cybersecurity and Technology Threats (high)
Key Strengths
- ●AEP's earnings increased significantly year-over-year due to strategic investments in transmission, favorable regulatory outcomes, and...
- ●The company is experiencing accelerating customer demand, particularly from data centers, and is strategically investing in generation and...
- ●New large load tariffs and customer contracts are being implemented to ensure new load growth is managed to protect existing customers'...
Cash Flow Health
Free Cash Flow8/8 positive
TTM$6.9B
Q4 '25
$18M-99%
Q3 '25
$2.2B+77%
FCF Margin
TTM31.7%
Q4 '250.3%-99%
Sector: 0.0%Top 10%
OCF Margin31.7%
OCF/NI1.94x
CapEx Coverage–
FCF Yield11.3%
FCF Growth (2Y)+28%
Cash Conversion Cycle
-96 days
DSO: 46+DIO: 0−DPO: 142
Capital Allocation & Returns
Balanced
Total Shareholder YieldEst.
Est.3.3%
Div Yield3.3%
+Est. Buyback4.8%
Balancing returns with reinvestment
Dividend & Payout Metrics
Dividend Yield (TTM)3.3%
FCF Payout Ratio28.9%
Free Cash Flow (TTM)$6.9B
Capital Return / FCF28.9%
Est. Dividends Paid (TTM)$2.0B
Estimated: Buyback data estimated from FCF. Actual repurchase data not available for this company.
Shows how management rewards shareholders
Operational Efficiency & Returns
Return on Invested CapitalTTM
6.4%
Stable
+0.0% YoY-1.1%
P25MedianP75
75th pctl (med: 0.1%)
DuPont BreakdownROIC = Margin × Turn × (1+D/E)
NOPAT Margin
23.5%
8Q: 21.8%
Asset Turnover
0.20x
8Q: 0.20x
Leverage (1+D/E)
2.54x
D/E: 1.54x
DuPont: 12.1% ≈ 6.4% ROIC
Asset & CapEx Efficiency
Fixed Asset Turn
0.26x
8Q:0.27x
+2.2%
Invested Cap Turn
0.27x
8Q:0.28x
+2.7%
Asset-based ROIC formula
QUARTERLY TRENDS
Last 8 quarters + TTM
| Metric | TTM | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 |
|---|---|---|---|---|---|---|---|---|---|
Revenue | $21.9B | $5.3B↓11.6% | $6.0B↑18.2% | $5.1B↓6.9% | $5.5B↑16.3% | $4.7B↓13.4% | $5.4B↑18.4% | $4.6B↓8.9% | $5.0B |
Operating Income | $5.3B | $1.1B↓26.8% | $1.5B↑8.7% | $1.4B↑8.9% | $1.3B↑17.2% | $1.1B↓18.9% | $1.4B↑97.6% | $683.9M↓41.7% | $1.2B |
Net Income | $3.6B | $582.0M↓40.1% | $972.0M↓20.7% | $1.2B↑53.2% | $800.2M↑20.5% | $664.0M↓30.8% | $959.6M↑182.0% | $340.3M↓66.1% | $1.0B |
Operating Cash Flow | $6.9B | $1.8B↓26.3% | $2.5B↑101.4% | $1.2B↓15.8% | $1.4B↓16.0% | $1.7B↓20.5% | $2.2B↑48.6% | $1.5B↑1.4% | $1.4B |
Free Cash Flow | $6.9B | $17.5M↓99.2% | $2.2B↑77.0% | $1.2B↓15.8% | $1.4B↑9.2% | $1.3B↓38.9% | $2.2B↑48.6% | $1.5B↑1.4% | $1.4B |
Total Equity | N/A |
Valuation Analysis
Fair Value
Price-to-EarningsTTM
17.2x
Volatile
8Q: 67.3x+105%
Multiple expansion without fundamental improvement
Valuation Lenses
Earnings
17.2x
vs – sector
Cash Flow
15.4x
EV/FCF vs –
Growth-Adj
0.9xPEG
Undervalued for growth
Quality-Adj
2.7P/E per %ROIC
ROIC: 6.4%
Shareholder Returns
Dividend
3.3%
Buyback
–
Total Yield
3.3%
Market Cap$61.64B
EV$106.70B
Multi-angle valuation analysis with sector context
Business Quality & Moat
Overall Quality Score
77/100
High Quality
Composite score: Returns (40%) + Consistency (30%) + Earnings Quality (30%)
Returns on Capital
Return on Equity (ROE)Above Avg
12.3%
8Q:–
Return on Invested Capital (ROIC)Top 25%
6.4%
8Q:–
Flat
vs Sector:0.1%
DuPont Analysis (ROIC = NOPAT Margin × Asset Turnover)
NOPAT Margin: 23.5%
Asset Turnover: 0.20x
Earnings Quality
Cash Conversion
1.94x
OCF / Net Income ✓
FCF Consistency
–
Positive quarters
Competitive Moat Indicators
Pricing Power
Gross Margin67.9%
Capital Efficiency
Invested Capital Turnover0.27x
Working Capital
Cash Conversion Cycle-96 days
Growth Quality & Momentum
Moderate Growth
Growth Quality Score
71/100
Growth 40%
Margins 30%
FCF 20%
Consistency 10%
Growth Rates
Revenue Growth YoY
10.9%
OpInc Growth YoY
1.7%
EPS Growth YoY
19.5%
FCF 3Y CAGR
28.4%
Growth Quality Analysis
✓Efficient Growth: Free cash flow growing faster than revenue
✓Sustainability Index: 7.5/10 - Highly sustainable growth
Margin Quality & Sustainability
Low Quality
Profitability Cascade
Gross
67.9%
Operating
24.3%
Above Avg in sector
Net
16.4%
Margins Unknown
Earnings Quality Signals
SBC / Revenue
—
FCF vs Net Gap
+15.4 pts
FCF: 31.7% | Net: 16.4%
Quality = stability + cash conversion + low dilution
Balance Sheet & Solvency
Leveraged
Net Debt / EBITDA
–Net Debt: $47.44B
Interest Coverage
–
Balance sheet risk & solvency analysis