Stock fact sheet · data as of
American Electric Power Company, Inc. (AEP): fair value, margin of safety and Wheel Score
Ticker symbol AEP · Utilities · Regulated Electric · United States · Blend
Is AEP undervalued?
American Electric Power Company, Inc. (AEP) closed at 129.24 on 5 Nov 2026, close to the GLS average fair value of 125.28 (3.2% above fair value). 3 of the 9 models that produced a number sit above the price, 6 below - the market and our models roughly agree. With little margin of safety either way, the case for or against the stock rests on the quality numbers and the option premium rather than on price.
The 9 models disagree widely: DDM gives 55.91 while Payback Time gives 274.51. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
Ranked against every other company we cover, neither cheapness nor growth clearly wins for AEP, so the nightly engine files it under Blend (value score 38, growth score 52, out of 100).
Nine valuation models for AEP
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 92.64 | -28% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 91.48 | -29% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 162.23 | +26% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 56.76 | -56% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 75.32 | -42% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 250.17 | +94% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 274.51 | +112% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 55.91 | -57% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 68.49 | -47% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -144.97 | -212% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 140.81 | +9% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: AEP passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 5.6 out of 10: a record that is solid on some of the four parts the score weighs (returns on capital, pricing power, lasting growth, balance sheet) and weaker on others.
Returns on capital are thin or negative - ROIC 4.4%, ROE 11.5%, ROA 3.1% - with debt at 1.61 times equity and a free-cash-flow yield of 8.5%.
The dividend yield is 2.94% at a payout ratio of 62%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Transmission And Distribution Companies 54%, Generation And Marketing 28%, AEP Transmission Holdco 18% (quarter Q3 FY2026).
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 2/10 on the GLS smart-money scales; the last recorded Congressional buy was on 26 Aug 2026.
| Piotroski F-score | 4 / 9 | ROIC | 4.4% |
|---|---|---|---|
| GLS Moat | 5.6 / 10 | ROE | 11.5% |
| Debt / equity | 1.61 | ROA | 3.1% |
| Free-cash-flow yield | 8.5% | Payout ratio | 62% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 2 / 10 |
Wheel Score 30: Weak
AEP scores 30 out of 100 on the Wheel Score, in the Weak band (under 50): it fails filter 3, below fair value - trades 3% above our fair value; and filter 4, financially healthy - Piotroski 4/9 (under 6); and filter 5, can repay its debt - 6.4 years to repay its debt (over 6); and filter 7, a premium worth selling - implied volatility 25% (under 25%), and the parts are thin too - value weak, premium weak, moat fair, health fair, red flags good, option trading good, stability strong. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.
Implied volatility on the near-the-money contracts is 25%, below the 25% the Wheel Trade Filter on premium asks for: a put pays too little to be worth selling. Chain open interest is 40,530 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 6.8M shares a day on a market cap of $70.4B, with a beta of 0.45 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that strong.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Passes | Listed options with 1,000+ contracts of open interest and 100+ traded a day |
| 2 | A real business, not a gamble | Passes | Profitable over the last twelve months - not a speculative stock, fund or note |
| 3 | Below fair value | Fails | trades 3% above our fair value |
| 4 | Financially healthy | Fails | Piotroski 4/9 (under 6) |
| 5 | Can repay its debt | Fails | 6.4 years to repay its debt (over 6) |
| 6 | No serious red flags | Passes | Red Flags score 60 or more out of 100 (earnings, margins, debt, analysts, filings and price checked the same way for every stock) |
| 7 | A premium worth selling | Fails | implied volatility 25% (under 25%) |
| 8 | Big enough | Passes | Market cap $1 billion or more |
| 9 | Not a penny stock | Passes | Share price $5 or more |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Weak | 3% above fair value | |
| Premium | Weak | implied volatility 25% | |
| Moat | Fair | moat 5.6/10 | |
| Health | Fair | Piotroski 4/9 | |
| Red Flags | Good | Red Flags score 80/100 | |
| Option trading | Good | 3,618 contracts a day, 40,530 open interest | |
| Stability | Strong | beta 0.45, $70.4B company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
No upcoming earnings date is recorded for AEP in the nightly calendar. The shares go ex-dividend on 10 Nov 2026 (0.9700 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Analysts upgraded AEP 2 times in the last 30 days with no downgrades; the latest action was a reiterated rating by BTIG on 29 Oct 2026.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Regulated Electric
The 12 companies below are the closest to American Electric Power Company, Inc. by market cap within the Regulated Electric industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| D Dominion Energy, Inc. | 69.75 | 45.03 | -55% | 30Weak | $61.3B |
| NGG National Grid plc | 85.22 | 46.78 | -82% | 36Weak | $85.7B |
| ETR Entergy Corporation | 111.90 | 62.45 | -79% | 27Weak | $53.5B |
| XEL Xcel Energy Inc. | 80.50 | 49.47 | -63% | 31Weak | $51.7B |
| DUK Duke Energy Corporation | 129.59 | 81.45 | -59% | 34Weak | $101.0B |
| EXC Exelon Corporation | 46.24 | 27.57 | -68% | 27Weak | $47.9B |
| ELC Entergy Louisiana, LLC COLLATERAL TR MT | 18.40 | 94.79 | +81% | 32No options | $46.4B |
| SOMN The Southern Company | 48.69 | 42.19 | -15% | 21No options | $107.1B |
| SOJE Southern Company (The) Series 2 | 15.55 | 32.26 | +52% | 35No options | $107.1B |
| SO The Southern Company | 93.12 | 53.55 | -74% | 36Weak | $107.1B |
| ED Consolidated Edison, Inc. | 120.30 | 108.65 | -11% | 29Weak | $44.3B |
| DUKU Duke Energy Corporation Units 1.08.29 | 51.14 | 48.11 | -6% | 15No options | $39.9B |
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the top 10 stocks that pass all 9 Wheel Trade Filters, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about AEP
Is AEP undervalued right now?
Not meaningfully: at 129.24 the stock trades within a few percent of the GLS average fair value of 125.28 (3.2% above fair value, data as of 5 Nov 2026).
What is the Wheel Score of AEP and what does it mean?
AEP scores 30 out of 100 (Weak) - it fails Wheel Trade Filters 3, 4, 5, 7. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for AEP?
125.28 per share as of 5 Nov 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does American Electric Power Company, Inc. report earnings next?
No upcoming earnings date is recorded for AEP in our calendar as of 5 Nov 2026; the Calendars page is refreshed every morning.
Does AEP have listed options, and how liquid are they?
Yes. The nightly snapshot found 128 listed contracts with 40,530 open interest across all expiries and implied volatility of 25% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.