Why American Electric Power (AEP) is a Top Growth Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why This 1 Growth Stock Should Be On Your Watchlist
Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
American Electric Power (AEP)
Columbus, OH-based American Electric Power Company, Inc. is a public utility holding company, which, through directly and indirectly owned subsidiaries, generates, transmits and distributes electricity, natural gas and other commodities. The company was incorporated in 1906 and reorganized in 1925. It is one of the largest integrated utilities in the United States, serving more than 5.6 million customers in 11 states. It has roughly 25,000 megawatts (MW) of generating capacity, of which almost 41% are coal-fired as of Dec 31, 2022 and nearly 40,000 miles of the electricity transmission system network. Its service area covers Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. Approximately 43% of the company’s power is generated from coal and lignite, 21% from nuclear energy, 19% from natural gas and oil and the remaining 17% from wind, water, pumped storage and other sources. The company mainly operates under the following business segments:
AEP is a Zacks Rank #3 (Hold) stock, with a Growth Style Score of B and VGM Score of B. Earnings are expected to grow 3.3% year-over-year for the current fiscal year, with sales growth of 1.5%.
Three analysts revised their earnings estimate higher in the last 60 days for fiscal 2023, while the Zacks Consensus Estimate has increased $0 to $5.26 per share. AEP also boasts an average earnings surprise of 1.2%.
Looking at cash flow, American Electric Power is expected to report cash flow growth of 8.7% this year; AEP has generated cash flow growth of 8.4% over the past three to five years.
With solid fundamentals, a good Zacks Rank, and top-tier Growth and VGM Style Scores, AEP should be on investors' short lists.
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American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report
