AEP American Electric Power
too hard · 36
Owner-earnings value$101.83
Price$119.73
Margin of safety
-14.9%
Quality gate · 36/100
⚠ sub-hurdle returns (median roic 6% < 9%) · over-levered (net debt/EBITDA 5.3x > 4x)
Median ROIC6.0%
Gross margin60.5%
Net debt / EBITDA5.3x
FCF conversion-60%
Share count / yr+1.7%
Profitable years4/4
Moat & management
Owner-earnings inputs
| Owner earnings (TTM) | 3.14B |
| Owner-earnings yield | 4.8% |
| Free-cash-flow yield | -3.7% |
| Growth used (normalized) | 3.7% |
| Market-implied growth (reverse DCF) | 7.5% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 9.0% |
Projected owner earnings
| Yr | Owner earnings | Growth | PV |
|---|---|---|---|
| 1 | 3.26B | 3.7% | 2.99B |
| 2 | 3.37B | 3.6% | 2.84B |
| 3 | 3.49B | 3.5% | 2.70B |
| 4 | 3.61B | 3.4% | 2.56B |
| 5 | 3.73B | 3.4% | 2.43B |
| 6 | 3.86B | 3.3% | 2.30B |
| 7 | 3.98B | 3.2% | 2.18B |
| 8 | 4.11B | 3.1% | 2.06B |
| 9 | 4.23B | 3.1% | 1.95B |
| 10 | 4.36B | 3.0% | 1.84B |
⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Price pays for ~8%/yr owner-earnings growth over 10y (reverse DCF); model credits 4%.