American Electric Power Company, Inc. (AEP) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-30.8%

$90.18

vs $130.39 price

Levered DCF

-$120.11

After debt service

Piotroski score

4 / 9

Average

Altman Z-score

0.9

Distress zone

Rating

B-

Overall 2 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	17.31×	16.47×	19.07×	21.05×	17.9×	18.75×	24.3×	19.16×
P/B	1.92×	1.81×	1.67×	2.03×	1.99×	2.01×	2.38×	1.94×
P/S	2.75×	2.45×	2.17×	2.52×	2.68×	2.77×	3×	2.28×
EV / EBITDA	11.75×	11.67×	11.86×	12.63×	11.97×	12.12×	13.63×	11.55×
Gross margin	31.8%	31.9%	29.0%	25.2%	28.1%	28.7%	25.5%	23.8%
Operating margin	24.3%	23.9%	21.3%	17.6%	19.6%	20.0%	17.5%	16.8%
Net margin	16.4%	14.9%	11.4%	11.9%	15.0%	14.8%	12.4%	11.9%
Current ratio	0.45×	0.44×	0.53×	0.51×	0.63×	0.44×	0.4×	0.48×
Debt / equity	1.61×	1.7×	1.73×	1.74×	1.63×	1.68×	1.56×	1.33×
Interest coverage	2.61×	2.56×	2.28×	2.44×	2.74×	2.57×	2.54×	2.76×
Dividend yield	3.4%	3.9%	4.2%	3.4%	3.4%	3.5%	2.9%	3.4%
Payout ratio	56.1%	64.2%	79.7%	71.3%	61.1%	64.8%	70.3%	65.0%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	11.5%	11.0%	8.7%	9.7%	11.1%	10.7%	9.8%	10.1%
Return on invested capital	4.7%	5.0%	4.5%	3.9%	3.9%	3.9%	3.9%	4.0%
Return on assets	3.1%	2.9%	2.3%	2.5%	2.8%	2.7%	2.5%	2.8%
Free cash flow yield	11.4%	-2.0%	-5.9%	-3.1%	-4.3%	-6.0%	-4.0%	-3.1%
Earnings yield	6.0%	6.1%	5.2%	4.7%	5.6%	5.3%	4.1%	5.2%
Enterprise value	$109.8B	$94.5B	$85.4B	$89.7B	$80.8B	$75.3B	$76.9B	$61.9B
Net debt / EBITDA	5.35×	5.63×	6.01×	5.79×	5.37×	5.48×	5.36×	4.67×
Cash conversion cycle (days)	4	23	42	17	10	31	11	15