AEP - American Electric Power: A Solid Pick For Dividend Growth Investors (Rating Upgrade)

2023-05-07 01:52:45 ET

Summary

• American Electric Power's operating EPS payout ratio is poised to marginally rise from 62.3% in 2022 to 63.7% in 2023.
• The electric utility's total revenue edged higher in the first quarter while its operating EPS declined during the period.
• My inputs into the discounted cash flows model and dividend discount model suggest shares of American Electric Power are 4% undervalued.
• AEP stock's 3.6% dividend yield, 6% to 7% annual operating EPS growth forecast, and the possibility for a small valuation upside paint an attractive total return picture.

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