Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 3.51%, lower than industry average of 4.31%.

Growth Trajectory

Profitability

In the growth phase company makes 27.19% profit on every dollar of sales, higher than industry average of 14.97%.

Profitability Trajectory

Risk Profile

Investors expect at least 5.33% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
69.14B USD
Equity Value
22.92B USD
FCF Yield
75.01%
Average ROIC
6.60%
Cost of Capital
6.59%
P/E Ratio
13.40x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues20.67B USD19.72B USD
Operating Income or EBIT5.76B USD4.77B USD
Interest Expense1.95B USD1.86B USD
Book Value Of Equity29.87B USD26.94B USD
Book Value Of Debt46.62B USD45.76B USD
Cash and Marketable Securities439.30M USD418.30M USD
Number of Shares Outstanding534.57M--
Minority interests42.30M USD0 USD
Current Stock Price108.34 USD--
Effective Tax Rate25.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
+0.48%
4.79%Company
vs
4.31%Industry
Above Industry
Operating Margin
+12.89%
27.86%Company
vs
14.97%Industry
Above Industry
American Electric Power Company, Inc. demonstrates superior performance in both growth and profitability compared to industry peers, indicating strong competitive advantages and operational excellence.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.82%
Reinvestment Rate
52.09%
Terminal value represents 56% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 38.96B USD Add
Present Value (Cash Flow Over Next 10 Years) 30.18B USD Add
Value of Operating Assets 69.14B USD Sub-total
Debt 46.62B USD Subtract
Minority Interests 42.30M USD Subtract
Cash 439.30M USD Add
Value of Equity 22.92B USD Sub-total
Number of Shares 534.57M shares Divisor
Estimated Value per Share (Fair Value) 42.87 USD Total
Current Market Price 108.34 USD Reference

Financial Projections

Total FCF Present Value
30.18B USD
Avg Revenue Growth
3.66%
Avg Operating Margin
27.04%
Avg ROIC
6.60%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue21.60B USD22.35B USD23.14B USD23.95B USD24.79B USD25.71B USD26.73B USD27.84B USD29.06B USD30.40B USD31.79B USD
Growth Rate 4.51% 3.50% 3.50% 3.50% 3.50% 3.72% 3.94% 4.16% 4.38% 4.59% 4.59%
PROFITABILITY
Operating Income6.01B USD6.13B USD6.29B USD6.46B USD6.63B USD6.87B USD7.15B USD7.44B USD7.77B USD8.13B USD8.50B USD
Operating Margin 27.86% 27.41% 27.19% 26.97% 26.74% 26.74% 26.74% 26.74% 26.74% 26.74% 26.74%
EBIT (1-tax)4.51B USD4.59B USD4.72B USD4.84B USD4.97B USD5.15B USD5.36B USD5.58B USD5.83B USD6.09B USD6.37B USD
CASH FLOW
Reinvestment525.76M USD544.20M USD563.28M USD583.04M USD641.11M USD1.40B USD1.54B USD1.69B USD1.85B USD1.94B USD3.32B USD
Free Cash Flow3.98B USD4.05B USD4.15B USD4.26B USD4.33B USD3.75B USD3.81B USD3.89B USD3.97B USD4.15B USD3.05B USD
Terminal Value--------------------72.24B USD
Present Value3.78B USD3.65B USD3.55B USD3.46B USD3.34B USD2.72B USD2.60B USD2.47B USD2.33B USD2.24B USD—
EFFICIENCY
ROIC 5.93% 6.00% 6.11% 6.23% 6.35% 6.53% 6.67% 6.82% 6.97% 7.14% 8.82%
Cost of Capital 5.32% 5.32% 5.32% 5.32% 5.32% 6.02% 6.72% 7.42% 8.12% 8.82% 8.83%
Sales/Capital 1.44x 1.44x 1.44x 1.44x 1.44x 0.72x 0.72x 0.72x 0.72x 0.72x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)