Fundamental analysis: American Electric Power Company, Inc. (AEP)

Awarener score: 5.5

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Very good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Average).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

Business has been slightly shrinking. It's been below average when measured against peer companies.
American Electric Power Company, Inc. business trend stability is very good. The higher the stability, the lower the risk. It looks slightly worse than rivals.

Margins score: 8.3

AEP profit margins -on goods and services sold- are usually very good. They stand top-notch against rival companies.
Business profit on sales tends to be excellent. It's below average when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain a slight improvement compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still slightly worse than similar companies.
Profits -before income taxes- are usually very good considering total sales, and remain similar to rivals.
Total net profit tends to be very good when confronted to sales. Company stands encouraging in relation to comparable firms.

Growth score: 3.4

American Electric Power Company, Inc. profit -on goods and services sold- has been growing at a very low pace. It's been close to average when compared to competitors.
In recent years, earnings -on operations- have been growing at a very low step, which has been slightly better than comparable firms.
Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares similar to peer enterprises.
Growth on earnings -before income taxes and interests on loans taken- have been almost stagnant. It turns to be close to average when compared to similar stocks.
In past years, growth on profits -before income taxes- was almost stagnant. It was slightly worse than rivals.
In the previous years, growth on total net profit has been almost null, and below average when measured against peer companies.
Earnings per share have been almost stagnant in past years. It's been lacking compared to industry peers.

Miscellaneous score: 9.0

AEP managed to pay no income taxes on profits made in the past years, sometimes even got a credit. It's been better than most peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.2

American Electric Power Company, Inc. usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain rather normal in relation to similar companies.
Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
In the past, got very good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 4.7

AEP usually uses a very large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is heavy. It stands more than average in relation to rival firms.
The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is similar to industry peers.
In the past twelve months it paid good dividends, considering the current stock price. It came somewhat better than competitors.
Dividend payments have been more or less stable in recent years. The company has behaved lacking compared to similar firms.
The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
The company somewhat enlarges a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains rather normal in relation to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a very weak position compared to rivals.
We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 6.0

American Electric Power Company, Inc. has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
The company has lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
Most resources controlled were provided for with financial debt. Creditors have more claims on the company than shareholders. Unless the company is a financial institution that takes deposits, the situation might be very risky. It remains worse than most rival firms.
Most controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks substantially worse when measured against rivals.
For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's a disappointment compared to peer firms.
For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is bottom tier against similar enterprises.
Usually, sales are mostly on cash. It still ranks similar to peers.
Normally has no inventories. It comes up as impressive in relation to competitors.
On average, it takes less than one month from the purchase to charging customers. It happens to be slightly better than peers.
On average pays suppliers approximately four months or higher after the purchase. It ranks more than average in relation to industry peers.
The company charges its customers long before it must pay its suppliers, so the more it sales, the more free funds it gets. It's excellent in relation to similar companies.
Net interest expenses consume a significant portion of usual business earnings, but are mostly bearable. It stands mediocre against rival firms.
Business earnings have usually been low when measured against loans taken. Even cutting back reinvesting in the business, it could take more than seven years to repay the obligations with current profitability. It ranks weak when measured against comparable enterprises.
Fixed assets turnover remains undisclosed. It looks we cannot relate it to similar firms.
Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still well ranked against peer companies.

Valuation score: 4.3

American Electric Power Company, Inc. looks very expensive in relation to profits and financial position. It happens to be below average when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
In the past twelve months, the company consumed funds. Either it reinvested in the business or genuine fund generation might be challenging, which stands mediocre against similar companies.
In the past years the company hardly generated enough genuine funds to cover up for its business needs. Business prospects should improve enough to be in a better position to reward investors. It's still below average when measured against industry firms.
In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up in a very weak position compared to peer ventures.
The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks somewhat worse than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is somewhat high. Improvement expectations are already in the stock price, which presents some risks. It ranks encouraging in relation to peer companies.
Comparing the current stock price with the past twelve-months revenues gives a three or four to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks close to average when compared to rival firms.
The relation between the stock price and accounting book value is extremely high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be encouraging in relation to industry peers.
In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still close to average when compared to peer companies.

Total score: 6.2

Company at a glance: American Electric Power Company, Inc. (AEP)

Sector, industry: Utilities, Utilities—Regulated Electric

Market Cap: 43.24 billions

Revenues TTM: 19.64 billions

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, hydro, 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. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.