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Here's Why You Should Add American Electric Power (AEP) Now

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Earnings estimates for American Electric Power Company, Inc. (AEP - Free Report) have been revised upward in the past 60 days, reflecting analysts’ optimism on the stock. The Zacks Consensus Estimate for 2019 earnings has moved up 0.5% during the said period.

American Electric Power engages in the generation, transmission as well as distribution of electricity for sale to retail and wholesale customers in the United States.

Let’s focus on the factors that make the stock an appropriate pick at the moment.

Price Movement

In the past 12 months, American Electric Power’s shares have rallied 24.3% compared with the industry’s rise of 15.4%.

Earnings & Surprise History

American Electric Power delivered fourth-quarter 2018 operating earnings per share of 72 cents, in line with the Zacks Consensus Estimate. The company’s average four-quarter positive earnings surprise is 3.34%.

Earnings & Revenue Estimate Revision

American Electric Power’s earnings estimate for 2019 and 2020 indicate rise of 4.56% and 6.46% on a year-over-year basis to $4.13 and $4.39 per share, respectively.

Revenue estimate for 2019 and 2020 reflect an increase of 0.43% and 2.46% on a year-over-year basis to $16.22 billion and $16.62 billion, respectively.

Return on Equity (ROE)

American Electric Power has an ROE of 10.32% compared with the industry average of 9.18%, which indicates its efficiency in utilizing shareholders’ funds.

Dividend Yield

Currently, the company has a dividend yield of 3.20% compared with the Zacks S&P 500 Composite’s 1.96% and industry’s 2.90%.

Zacks Rank & Other Key Picks

American Electric Power currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few other top-ranked stocks from the same industry are NextEra Energy, Inc (NEE - Free Report) , The Southern Company (SO - Free Report) and IDACORP (IDA - Free Report) , each holding a Zacks Rank of 2.

NextEra Energy pulled off an average positive earnings surprise of 2.52% in the last four quarters. The company’s long-term (three to five years) earnings growth is pegged at 7.70%

The Southern Company pulled off an average positive earnings surprise of 7.85% in the last four quarters. The company’s long-term earnings growth is pegged at 4.50%

IDACORP pulled off an average positive earnings surprise of 9.60% in the last four quarters. The company’s long-term earnings growth is pegged at 2.60%

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