American Electric Power (NYSE: AEP) is one of 80 public companies in the “Electric Utilities” industry, but how does it weigh in compared to its rivals? We will compare American Electric Power to similar businesses based on the strength of its profitability, institutional ownership, dividends, valuation, earnings, analyst recommendations and risk.

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 12.21% 9.67% 2.73%
American Electric Power Competitors -6.59% 8.39% 2.56%

Volatility & Risk

American Electric Power has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, American Electric Power’s rivals have a beta of 0.63, indicating that their average share price is 37% less volatile than the S&P 500.

Earnings & Valuation

This table compares American Electric Power and its rivals gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
American Electric Power $16.40 billion $610.90 million 20.04
American Electric Power Competitors $7.66 billion $831.80 million 28.16

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

Dividends

American Electric Power pays an annual dividend of $2.48 per share and has a dividend yield of 3.2%. American Electric Power pays out 64.8% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.1% and pay out 97.7% of their earnings in the form of a dividend. American Electric Power has increased its dividend for 4 consecutive years. American Electric Power is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for American Electric Power and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 8 5 0 2.38
American Electric Power Competitors 533 2959 2383 42 2.33

American Electric Power presently has a consensus target price of $73.91, suggesting a potential downside of 3.71%. As a group, “Electric Utilities” companies have a potential upside of 5.60%. Given American Electric Power’s rivals higher possible upside, analysts plainly believe American Electric Power has less favorable growth aspects than its rivals.

Institutional and Insider Ownership

71.4% of American Electric Power shares are owned by institutional investors. Comparatively, 65.4% of shares of all “Electric Utilities” companies are owned by institutional investors. 0.2% of American Electric Power shares are owned by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

American Electric Power beats its rivals on 8 of the 15 factors compared.

American Electric Power Company Profile

American Electric Power Company, Inc. (AEP) is a public utility holding company that owns, directly or indirectly, all of the outstanding common stock of its public utility subsidiaries and varying percentages of other subsidiaries. The service areas of the Company’s public utility subsidiaries cover the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The Company’s segments include Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing. AEP’s vertically integrated utility operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers. Transmission and Distribution Utilities segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers. AEP Transmission Holdco develops, constructs and operates transmission facilities.

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