Morningstar Rating

Stock Research and Analysis

by Andrew Bischof, CFA

Bulls Say

Investments in transmission and environmental improvements during the next several years should provide for strong earnings growth.
AEP earns regulated returns in many different state jurisdictions, protecting AEP's earnings from the impact of one adverse ruling.
A 4.0% dividend yield as of mid-March is in line with the sector average. Read more 

Bears Say

The company's Ohio generation assets are predominantly coal, putting it at a cost disadvantage in a period of low natural gas prices.
Greenhouse gases are a long-term problem for AEP's coal plants because there currently is no economically feasible technology to eliminate carbon dioxide emissions.
About 30% of AEP's revenue and one fourth of earnings are generated from Ohio, which has one of the most unstable regulatory environments in the country. Read more 

Management

Management has done a commendable job representing shareholders' interests by presenting Ohio regulators with a fair solution for the state's transition to a competitive energy market. Management has pledged it plans to take little market risk with   Read more 

Profile

American Electric Power is one of the largest regulated utilities in the U.S., providing generation, transmission, and distribution services to more than 5 million retail   Read more 

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Dividend Yields Attractive for Underperforming Stocks 
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