American Electric Power Co Inc Stock Buy Recommendation Reiterated (AEP)
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- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- AEP, with its decline in revenue, underperformed when compared the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- AMERICAN ELECTRIC POWER CO's earnings per share declined by 25.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERICAN ELECTRIC POWER CO increased its bottom line by earning $3.24 versus $2.53 in the prior year. For the next year, the market is expecting a contraction of 5.9% in earnings ($3.05 versus $3.24).
- The gross profit margin for AMERICAN ELECTRIC POWER CO is currently lower than what is desirable, coming in at 33.60%. Regardless of AEP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AEP's net profit margin of 11.70% compares favorably to the industry average.
- Even though the current debt-to-equity ratio is 1.21, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.35 is very low and demonstrates very weak liquidity.
--Written by a member of TheStreet Ratings Staff. FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!
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