MeritValue

AMERICAN ELECTRIC POWER CO INC

AEPdata completeness 100%19 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'gainsOnRealEstateSales'; no data for concept 'realEstateImpairment'

The thesis, from the filings

AMERICAN ELECTRIC POWER CO INC earns about 3% on invested capital, but has diluted owners by 7% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $47.53 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$16.8B1$19.4B2$19.5B3$20B3$21.7B3
Net income$2.49B4$2.31B5$2.21B6$2.98B6$3.7B6
Operating cash flow$3.84B7$5.29B8$5.01B9$6.8B9$6.94B9
Capital expenditure——$155M10$399M10$3.45B10
Free cash flow (derived)——$4.86B9$6.41B9$3.49B9
Total debt$70.9B11$80.6B12$85.1B13$89.4B14$96.8B14
Cash & equivalents$403.4M15$509.4M16$330.1M17$203M18$197M18
Diluted shares501.8M513.5M520.2M531.3M537.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$579.35
your share of equity
Profit it earned you last year
$68.77
Free cash flow it threw off
$64.95
Debt you’d be carrying
$1,800.24

10 shares is a claim on $579.35 of net worth that earned you $68.77 and generated $64.95 of cash last year, against $1,800.24 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
3% avg · 5y
FY21 4%FY22 4%FY23 4%FY24 3%FY25 3%

It earned an average 3% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+7% shares · 5y

Share count is up 7% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 36% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$4.86B
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$4.86B
Earnings Power Value
$47.53
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$2.49B
  • growthAssumed0.0%
Graham Number
$92.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000004904-24-000020 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000004904-25-000027 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000004904-26-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000004904-24-000020 (ProfitLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000004904-25-000027 (ProfitLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000004904-26-000013 (ProfitLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000004904-24-000020 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000004904-25-000027 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000004904-26-000013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2023-12-31 · accession 0000004904-26-000013 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2021-12-31 · accession 0000004904-23-000011 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2022-12-31 · accession 0000004904-24-000020 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2023-12-31 · accession 0000004904-25-000027 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-12-31 · accession 0000004904-26-000013 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2021-12-31 · accession 0000004904-23-000011 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0000004904-24-000020 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0000004904-25-000027 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2024-12-31 · accession 0000004904-26-000013 (CashAndCashEquivalentsAtCarryingValue)