American Electric Power Co Inc Stock Buy Recommendation Reiterated (AEP)
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- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 12.9%. 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 11.71% compares favorably to the industry average.
--Written by a member of TheStreet Ratings Staff. It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
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