#4 - American Electric Power (NASDAQ:AEP)
American Electric Power (NYSE: AEP) - You've probably noticed a theme. When it comes to utility stocks, bigger is better. And few utility companies cast as large a footprint as American Electric Power (AEP). The company operates across eleven states and services five million customers.
Make no mistake about it; AEP generates most of their revenue comes from their core business of generating power. With 26 gigawatts of power generation assets and 40,000 miles of transmission lines, they are a huge utility. But the company is making strides to adapt to the changing industry. They are reducing their reliance on coal for its power capacity. It’s currently around 50% (down from 70% in 2005) and they are working down to a low of 33%. They are also working to increase their renewable power base and have made impressive strides. Since 2005, they have tripled their renewable base from a minuscule 4% to 13%. This is one of their largest opportunities for growth and that is reflected in the company's future plans which include plans for 5.3 gigawatts of wind turbines and 3.1 gigawatts of solar construction through 2030.
One of the ways AEP is facilitating this plan is by selling assets. This shifting portfolio is lending support to the company’s projections for annual earnings growth in the range of 5-7%. With a share price around $73, AEP has largely recovered from the broad utility sell-off in November. The current dividend yield is around 3.3%, the stock still is showing room for growth.
About American Electric Power
American Electric Power Company, Inc, an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments.
Read More - Current Price
- $92.75
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 9 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $97.13 (4.7% Upside)
