American Electric Power Company, Inc. (AEP)
Quantitative Summary
DeterministicAEP trades at 18.7x earnings, roughly in line with its sector average of 24.4x. Financial health is average: Piotroski 5/9, Altman Z 1.0.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of this utility operator present a distinct capital efficiency challenge, evidenced by an ROIC-WACC spread contraction to -2.2%, indicating that current returns on invested capital fail to cover the cost of financing after tax adjustments. Despite a robust net margin of 16.4% driving earnings per share, the DuPont decomposition reveals this profitability is heavily leveraged rather than operational; with asset turnover at merely 0.19x and an equity multiplier of 3.55x, returns are amplified by financial leverage instead of high capital efficiency or rapid asset cycling. While the Beneish M-Score of -2.48 suggests low earnings manipulation risk and revenue growth remains healthy at 10.9% YoY, the Altman Z-score of 1.0 flags elevated distress probabilities relative to historical norms, creating a tension between strong top-line expansion and underlying balance sheet fragility.
Valuation metrics currently trade at a discount relative to peers, with a P/E ratio of 19.9x compared to a sector average of 22.5x, potentially reflecting market skepticism regarding the low ROIC-WACC spread rather than fundamental deterioration alone. The divergence between the high Fama-French Alpha of 21.74% and the negative Profitability Factor (RMW) of -0.033 suggests that while the stock has outperformed on a risk-adjusted basis, it lacks the characteristic high-margin reinvestment profile typical of premium growth names within its classification. This pricing dynamic appears to penalize the capital structure inefficiencies despite solid margin performance and value-oriented factor loading (HML: 0.442).
Insider activity over the last ninety days shows net selling totaling $177,602, which may signal management caution regarding near-term valuation levels or liquidity needs amidst the elevated Altman Z-score. The combination of a negative ROIC spread and insider outflows creates a risk-reward profile where downside protection relies on mean reversion in leverage metrics rather than organic margin expansion or improved capital allocation efficiency.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
Valuation Context
Currently trading 16% above its 5-year average P/E of 17.7x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedAmerican Electric Power Company operates within the utilities sector at a current price of $131.59, presenting a technical landscape where risk dynamics are heavily influenced by fundamental backdrop constraints typical for regulated infrastructure assets. The absence of specific drawdown or volatility metrics in the provided dataset precludes a precise quantification of recent momentum fragility; however, the utility classification inherently suggests that any observed price fluctuations may be less driven by speculative capital flows and more responsive to regulatory shifts or fuel cost adjustments. Without data on moving averages or relative strength indices, it remains unclear whether the current trajectory represents a structural shift in earnings expectations or temporary market noise amplified by sector-wide sensitivities. The interplay between the stock's valuation level and its industry peers likely dictates risk parameters rather than standalone technical patterns. In environments where volatility is suppressed due to defensive characteristics, even modest deviations from mean prices can signal significant relative strength or weakness if fundamental support erodes. Conversely, sustained movement in either direction without corresponding volume spikes might indicate a fragile momentum structure reliant on short-term sentiment rather than deepening value changes. Ultimately, the technical setup for AEP at this juncture requires careful scrutiny of how external macroeconomic factors interact with its stable utility operations to determine if current price action reflects enduring trends or transient market inefficiencies that could reverse quickly upon new information emergence.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-08 | $0.9500 | 0.0% |
| 2026-02-10 | $0.9500 | 0.0% |
| 2025-11-10 | $0.9500 | +2.2% |
| 2025-08-08 | $0.9300 | 0.0% |
| 2025-05-09 | $0.9300 | 0.0% |
| 2025-02-10 | $0.9300 | 0.0% |
| 2024-11-08 | $0.9300 | +5.7% |
| 2024-08-09 | $0.8800 | 0.0% |
| 2024-05-09 | $0.8800 | 0.0% |
| 2024-02-08 | $0.8800 | 0.0% |
| 2023-11-09 | $0.8800 | +6.0% |
| 2023-08-09 | $0.8300 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLU or VPU, the fund manager is mechanically forced to buy or sell AEP shares regardless of American Electric Power Company, Inc.'s individual fundamentals. We estimate $11.5B of passive capital is structurally linked to AEP through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in American Electric Power Company, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If American Electric Power Company, Inc. (AEP) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies NEXTERA ENERGY INC (NEE) as the most exposed collateral stock, sharing 1 ETFs with AEP. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 33 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
AEP Ownership Dynamics
Passive funds hold 1 in every 6 AEP shares, reducing daily market volatility.
American Electric Power Company, Inc. (AEP) exerts notable gravity on the passive index market, currently representing 5.0% of the State Street Utilities Select Sector SPDR ETF (XLU) and 4.6% of the VPU (VPU). Across 32 tracked ETFs, approximately 90M shares (16.5% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest AEP Exposure
Float lock-up computed from 32 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
AEP Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for American Electric Power Company, Inc. over the past year sits near $115.81 (8% of 252-day volume). The current price of $127.11 trades 9.8% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
AEP Capital Efficiency
How efficiently does American Electric Power Company, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
American Electric Power Company, Inc. converts -18% of its EBITDA into free cash flow, negative FCF conversion — the company is consuming cash faster than it generates EBITDA, which is unsustainable long-term. The 118% reinvestment rate signals aggressive capacity expansion. However, the ROIC-WACC spread is negative (-2.3%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 1,256 | $127.95 | $160,705.2 |
| 2026-05-07 | 2 | $132.56 | $265.12 |
| 2026-05-05 | 4 | $134.66 | $538.64 |
| 2026-05-04 | 1 | $136.91 | $136.91 |
| 2026-04-27 | 4 | $134.73 | $538.92 |
| 2026-04-16 | 2 | $134.39 | $268.78 |
| 2026-04-15 | 250 | $135.46 | $33,865 |
| 2026-04-14 | 7 | $134.46 | $941.22 |
| 2026-04-10 | 1 | $137.15 | $137.15 |
| 2026-04-09 | 1,004 | $134.71 | $135,248.84 |
| 2026-04-07 | 33 | $132.36 | $4,367.88 |
| 2026-04-02 | 31 | $131.67 | $4,081.77 |
| 2026-04-01 | 1,554 | $131.08 | $203,698.32 |
| 2026-03-30 | 1 | $130.10 | $130.1 |
| 2026-03-26 | 14 | $128.30 | $1,796.2 |
| 2026-03-25 | 53 | $128.80 | $6,826.4 |
| 2026-03-24 | 169,677 | $127.92 | $21.7M |
| 2026-03-23 | 169,652 | $125.66 | $21.3M |
| 2026-03-20 | 34,872 | $128.72 | $4.5M |
| 2026-03-19 | 69,268 | $130.97 | $9.1M |
| 2026-03-16 | 1,266 | $133.61 | $169,150.26 |
| 2026-03-13 | 8,866 | $132.22 | $1.2M |
| 2026-03-12 | 3,441 | $131.26 | $451,665.66 |
| 2026-03-09 | 54,215 | $131.87 | $7.1M |
| 2026-03-06 | 17,545 | $132.04 | $2.3M |
| 2026-03-05 | 199,562 | $133.52 | $26.6M |
| 2026-03-04 | 44,128 | $131.92 | $5.8M |
| 2026-03-03 | 6 | $133.29 | $799.74 |
| 2026-03-02 | 61,776 | $133.82 | $8.3M |
| 2026-02-27 | 134,857 | $132.10 | $17.8M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| EXC | 0.732 | 0.648 | High co-movement |
| AEE | 0.719 | 0.683 | High co-movement |
| LNT | 0.716 | 0.677 | High co-movement |
| DUK | 0.706 | 0.588 | High co-movement |
| WEC | 0.698 | 0.629 | Moderate |
| SO | 0.684 | 0.593 | Moderate |
| EVRG | 0.682 | 0.636 | Moderate |
| FE | 0.677 | 0.638 | Moderate |
| DTE | 0.672 | 0.645 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare AEP to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.