AEP
American Electric Power · Utilities · Electric Utilities
$121.98
52w 105.70 – 140.58
20y monthly, adjusted
Mkt cap
$66.4B
P/E
18.6
P/FCF
19.7
FCF yield
5.1%
ROE
11.9%
Shldr yield
2.9%
div 2.9% + bb 0.0%
What today's price assumes
At $66.4B, the market is pricing in 7.5% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew -3.0% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $59 · $59 · $73 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 5.0× across 19 years, AEP would trade near $64/share (25th–75th percentile: $46–$98); it trades at 9.6× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+3.8%
Rev 5y
+7.8%
Rev 10y
+2.8%
EPS 5y
+8.5%
EPS 10y
+4.8%
FCF 5y
−1.9%
FCF 10y
−3.0%
Fundamentals
Fiscal 2007–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q1'26 | $5.9B | +5.2% | $903.0M | +12.6% | 1.60 | $1.5B |
| Q4'25 * | $5.1B | +6.2% | $605.4M | −9.1% | 1.06 | $1.8B |
| Q3'25 | $6.0B | +9.0% | $1.0B | +4.0% | 1.81 | $2.5B |
| Q2'25 | $5.1B | +8.5% | $1.3B | +276.1% | 2.29 | $1.2B |
| Q1'25 | $5.6B | +10.7% | $802.0M | −20.3% | 1.50 | $1.4B |
| Q4'24 * | $4.8B | −5.8% | $666.1M | +97.0% | 1.24 | $1.7B |
| Q3'24 | $5.5B | +2.4% | $961.7M | +0.4% | 1.80 | $2.2B |
| Q2'24 | $4.7B | +6.5% | $342.5M | −33.6% | 0.64 | $1.5B |
| Q1'24 | $5.1B | +8.4% | $1.0B | +151.2% | 1.90 | $1.4B |
| Q4'23 * | $5.1B | +9.0% | $338.2M | −38.0% | 0.63 | $1.3B |
| Q3'23 | $5.3B | −3.3% | $958.3M | +84.0% | 1.83 | $1.8B |
| Q2'23 | $4.4B | −5.8% | $516.1M | −0.9% | 1.01 | $1.2B |
| Q1'23 | $4.7B | +2.1% | $400.4M | −44.2% | 0.77 | $717.8M |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +3.8% | +7.8% | +2.8% | +2.8% |
| Operating cash flow | +9.5% | +12.6% | +3.9% | +6.6% |
| Free cash flow | −12.9% | −1.9% | −3.0% | +2.2% |
| EPS (diluted) | +14.0% | +8.5% | +4.8% | +6.7% |
| Equity | +9.2% | +8.7% | +5.7% | +5.7% |
| LT debt | +8.7% | +8.8% | +9.5% | +7.2% |
| Diluted shares | +1.5% | +1.6% | +0.9% | +0.8% |
| Stock price | +19.8% | +10.1% | +10.3% | +12.0% |
$100, 3 years ago
$172vs $176 in SPY
19.8% vs 20.7%/yr
$100, 5 years ago
$162vs $181 in SPY
10.1% vs 12.6%/yr
$100, 10 years ago
$266vs $412 in SPY
10.3% vs 15.2%/yr
$100, 15 years ago
$544vs $813 in SPY
12.0% vs 15.0%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$6.26
$30.4B created / $4.9B retained
Last 10 years
$6.01
$42.7B created / $7.1B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
9.2%
OCF ÷ (equity + debt)
OCF / EV yield
6.2%
MC vs 10× OCF
0.99
≤1 = priced under 10× OCF
Debt / FCF
12.6y
SBC / FCF
1.5%
Owner earnings
$3.4B
OCF − capex − SBC
OE yield
5.0%
Share count 5y
+1.7%
per year; negative = buybacks
Capital intensity
3.4%
net PP&E ÷ revenue
Sales efficiency
$-9.31
new PP&E per $1 new revenue, 5y
Growth engine (5y): reinvested 93.0% of operating cash flow at an incremental return of 12.0% — an organically fundable growth rate of about 11.2% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
16 of 26 checks pass · 62%. Checks with structurally missing inputs are excluded.
Growth & Consistency
5/7
- pass
Revenue growth
7.8% · 5y CAGR ≥ 5%
- pass
EPS growth
8.5% · 5y CAGR ≥ 5%
- fail
FCF growth
-1.9% · 5y CAGR ≥ 5%
- fail
Revenue rises consistently
6 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
- pass
Cash flow keeps up with sales
12.6% vs 7.8% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
4/6
- pass
Net margin
17.0% · ≥ 8%
- pass
Operating margin
24.5% · ≥ 10%
- na
Gross margin stable or rising
— · no drop > 2 pts over 3y
- fail
Return on equity
11.9% · ≥ 12%
- fail
Cash ROIC
9.2% · ≥ 12%
- pass
FCF margin
16.1% · ≥ 5%
- pass
Earnings back their cash
OCF $6.9B vs NI $3.7B · OCF ≥ net income (latest FY)
Balance Sheet
2/5
- fail
Debt payable from cash flow
12.6y · LT debt ≤ 3× FCF
- fail
Cash cushion
0% · cash ≥ 50% of LT debt
- pass
Leverage
1.42 · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$31.1B · equity > 0 and grew over ~5y
- fail
Interest burden
38% · interest ≤ 15% of operating income
Capital Allocation
2/4
- fail
Share count flat or shrinking
1.7% · ≤ +0.5%/yr over ~5y
- pass
Stock comp restrained
2% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
58% · dividends + buybacks ≤ 100% of FCF
- fail
Repurchases are a habit
0 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
3/4
- pass
FCF yield
5.1% · ≥ 3%
- pass
Earnings multiple
18.6 · P/E ≤ 25
- fail
Price asks less than history delivered
7.5% vs -3.0% · implied FCF growth ≤ historical FCF CAGR
- pass
Shareholder yield
2.9% · dividends + buybacks ≥ 2% of market cap
Red flags
Mechanical checks — a flag is a question to investigate, not a verdict
Heavy debt load
Long-term debt exceeds 5 years of free cash flow.
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 21,702 | — | 5,319 | 3,696 | 6.66 | 6,944 | 3,453 | 3,491 | 2,008 | — | 53 | 197 | 44,128 | 31,138 | 537 |
| 2024 | 19,970 | — | 4,304 | 2,976 | 5.58 | 6,804 | 399 | 6,405 | 1,898 | — | 53 | 203 | 39,308 | 26,944 | 531 |
| 2023 | 19,456 | — | 3,556 | 2,213 | 4.24 | 5,012 | 155 | 4,857 | 1,752 | — | 51 | 330 | 37,653 | 25,247 | 520 |
| 2022 | 19,392 | — | 3,483 | 2,306 | 4.49 | 5,288 | — | 5,288 | 1,645 | — | 63 | 509 | 34,315 | 23,893 | 513 |
| 2021 | 16,792 | — | 3,411 | 2,488 | 4.96 | 3,840 | — | 3,840 | -1,520 | — | — | 403 | 31,301 | 22,433 | 502 |
| 2020 | 14,919 | — | 2,988 | 2,197 | 4.42 | 3,833 | 0 | 3,833 | 1,425 | — | — | 393 | 28,986 | 20,551 | 497 |
| 2019 | 15,561 | — | 2,592 | 1,920 | 3.88 | 4,270 | 918 | 3,352 | 1,350 | — | — | 247 | 25,127 | 19,632 | 495 |
| 2018 | 16,196 | — | 2,683 | 1,931 | 3.90 | 5,223 | 0 | 5,223 | 1,256 | — | — | 234 | 21,648 | 19,028 | 494 |
| 2017 | 15,425 | — | 3,525 | 1,929 | 3.88 | 4,270 | 0 | 4,270 | 1,192 | — | — | 215 | 19,420 | 18,287 | 493 |
| 2016 | 16,380 | — | 1,164 | 618 | 1.24 | 4,522 | 108 | 4,414 | 1,121 | — | — | 211 | 17,378 | 17,397 | 492 |
| 2015 | 16,453 | — | 3,334 | 2,052 | 4.17 | 4,749 | 5 | 4,743 | 1,059 | — | — | 176 | 17,741 | 17,892 | 491 |
| 2014 | 16,379 | — | 3,127 | 1,638 | 3.34 | 4,602 | 65 | 4,538 | 998 | — | — | 163 | 16,012 | 16,820 | 489 |
| 2013 | 14,814 | — | 2,823 | 1,480 | 3.04 | 4,096 | 32 | 4,064 | 954 | — | — | 118 | 16,828 | 16,085 | 487 |
| 2012 | 14,945 | — | 2,656 | 1,259 | 2.60 | 3,804 | 94 | 3,710 | 916 | — | — | 279 | 15,586 | 15,237 | 485 |
| 2011 | 15,116 | — | 2,782 | 1,946 | 4.02 | 3,788 | 19 | 3,769 | 898 | — | — | 221 | 15,083 | 14,664 | 482 |
| 2010 | 14,427 | — | 2,663 | 1,214 | 2.53 | 2,662 | 155 | 2,507 | 824 | — | — | 294 | 15,502 | 13,622 | 480 |
| 2009 | 13,489 | — | 2,771 | 1,360 | 2.96 | 2,475 | 104 | 2,371 | 758 | — | — | 490 | 15,757 | 13,140 | 459 |
| 2008 | 14,440 | — | 2,787 | 1,383 | 3.42 | 2,581 | 160 | 2,421 | 666 | — | — | 411 | 15,536 | 10,693 | 404 |
| 2007 | 13,380 | — | 2,319 | 1,092 | 2.72 | 2,394 | 512 | 1,882 | 636 | — | — | 178 | — | 10,097 | 400 |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.