American Electric Power (AEP)

Utilities · $69.6B market cap · SEC CIK 0000004904

Next reports on Feb 10, 2027, after the close, with analysts expecting $1.32 in earnings per share.

52-week range $112.54 to $140.58. 9% below its 52-week high and 14% above its low.

The case for AEP

• Generated $3.5B of free cash flow in FY2025, 16% of revenue.
• Revenue growing 11.4% year over year.
• Pays a 4.5% dividend while you wait.
• Moves less than the market (beta 0.43).
• Free-cash-flow yield of 5.0% is higher than 100% of Utilities companies.

The case against

• Long-term debt of $44.1B would take 6 years of operating cash flow to repay.
• Earnings per share fell 10.3%.
• Current liabilities exceed current assets (ratio 0.51).

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Utilities companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Each factor except momentum is half fixed thresholds, half rank among the 31 Utilities companies.

The financials

The financials, five years deep

Pulled from American Electric Power's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What American Electric Power says it does

Overview and Description of Major Subsidiaries AEP was incorporated under the laws of the State of New York in 1906 and reorganized in 1925. It is a public utility holding company that directly owns all of the outstanding common stock of the public utility subsidiaries identified below. The service areas of AEP’s public utility subsidiaries cover portions of the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. Transmission networks are interconnected with extensive distribution facilities in the territories served. The public utility subsidiaries of AEP have traditionally provided electric service, consisting of generation, transmission and distribution, on an integrated basis to their retail customers. Restructuring laws in Michigan, Ohio and the ERCOT area of Texas have caused AEP public utility subsidiaries in those states to unbundle previously integrated…

Risk factors AEP lists in its 10-K

• AEP may not be able to recover the costs of substantial planned investment in capital improvements and additions. (Applies to all Registrants)
• The business and capital investment plans of AEP depend, in part, on the continued growth and viability of data centers and large load customers interconnecting with the AEP System. (Applies to all Registrants)
• The business and capital investment plans of AEP are subject to execution risks. (Applies to all Registrants)
• Regulated electric revenues and earnings are dependent on federal and state regulations that may limit AEP’s ability to recover costs and other amounts. (Applies to all Registrants)
• Regulated electric revenues and earnings are subject to prudency review. (Applies to all Registrants)
• Regulatory bodies may not allow recovery of costs incurred on a timely basis. (Applies to all Registrants)
• AEP is subject to negative publicity. (Applies to all Registrants)
• AEP’s transmission investment strategy and execution are dependent on federal and state regulatory policy and implementation by RTOs. (Applies to all Registrants)
• Certain elements of AEP’s transmission formula rates have been challenged, which could result in lowered rates and/or refunds of amounts previously collected. (Applies to all Registrants other than AEP Texas)
• Changes in technology and regulatory policies may lower the value of electric utility facilities and franchises. (Applies to all Registrants)
• AEP is exposed to nuclear generation risk. (Applies to AEP and I&M)
• AEP subsidiaries are exposed to risks through participation in the market and transmission structures in various regional power markets that are beyond their control. (Applies to all Registrants)
• AEP could be subject to higher costs and/or penalties related to mandatory reliability standards. (Applies to all Registrants)
• AEP’s financial performance may be adversely affected if AEP is unable to successfully operate facilities or perform certain corporate functions. (Applies to all Registrants)
• Physical attacks or hostile cyber intrusions could severely impair operations, lead to the disclosure of confidential
• information and damage AEP’s reputation
• The failure of AEP or third-party vendor information technology systems, or the failure to enhance existing information technology systems and implement new technology, could adversely affect AEP. (Applies to all Registrants)
• The amount of taxes imposed on AEP could change. (Applies to all Registrants)
• Shareholder activism could cause AEP to incur significant expense, hinder execution of AEP’s business strategy and impact AEP’s stock price. (Applies to all Registrants)
• Downgrades in AEP’s credit ratings could negatively affect its ability to access capital. (Applies to all Registrants)
• AEP and AEPTCo have no income or cash flow apart from dividends paid or other payments due from their subsidiaries. (Applies to AEP and AEPTCo)
• Supply chain disruptions, tariffs and inflation could negatively impact operations and corporate strategy. (Applies to all Registrants)
• AEP’s results of operations and cash flows may be negatively affected by a lack of growth or slower growth in the number of customers, a decline in customer demand or a recession. (Applies to all Registrants)
• Failure to attract and retain an appropriately qualified workforce and management could harm results of operations. (Applies to all Registrants)
• AEP is subject to physical and financial risks associated with climate change. (Applies to all Registrants)
• The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to AEP’s workforce and the general public. (Applies to all Registrants)
• Adverse outcomes in AEP’s material legal proceedings could materially and adversely affect AEP’s results of operations and financial condition. (Applies to all Registrants)
• Disruptions at power generation facilities owned by third-parties could interrupt the sales of transmission and distribution services. (Applies to AEP, AEP Texas and OPCo)
• Compliance with legislative and regulatory requirements may lead to increased costs and result in penalties. (Applies to all Registrants)
• Costs of compliance with existing and evolving environmental laws are significant. (Applies to all Registrants except AEPTCo)
• Regulation of GHG emissions could materially increase costs to AEP and its customers or cause some electric generating units to be uneconomical to operate or maintain. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)
• AEP may be unable to procure or construct generation capacity when needed or to recover the costs of such generation capacity. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)
• Courts adjudicating nuisance and other similar claims in the future may order AEP to pay damages or to limit or reduce emissions. (Applies to all Registrants except AEP Texas and AEPTCo)
• Commodity trading and marketing activities are subject to inherent risks which can be reduced and controlled but not eliminated. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)
• Parties with whom AEP has contracts may fail to perform their obligations, which could harm AEP’s results of operations. (Applies to all Registrants)
• OVEC may require additional liquidity and other capital support. (Applies to AEP, APCo, I&M and OPCo)

Filings

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