COLUMBUS, Ohio - American Electric Power Co. (NASDAQ:AEP), one of the nation's largest power generators, announced an increase in its quarterly cash dividend. The company's Board of Directors declared a regular quarterly cash dividend of 93 cents per share on its common stock, marking a 5-cent increase from the previous dividend.
The dividend is set to be paid on December 10, 2024, to shareholders who are on record as of November 8, 2024. This upcoming dividend payment will be the 458th consecutive quarterly cash dividend paid by AEP since July 1910, showcasing the company's long-standing practice of returning value to its shareholders.
Bill Fehrman, AEP president and chief executive officer, emphasized the company's commitment to delivering consistent value to shareholders and reliable, affordable energy to customers. Fehrman stated, "Our nearly 115-year history of consecutive quarterly dividends reflects this commitment."
AEP operates a vast transmission and distribution network, delivering power to 5.6 million customers across 11 states. With nearly 16,000 employees, the company manages the nation's largest electric transmission system, comprising over 40,000 miles of transmission lines and more than 225,000 miles of distribution lines. AEP's generating capacity is approximately 29,000 megawatts, including nearly 6,000 megawatts of renewable energy.
Further demonstrating its commitment to sustainability and reliability, AEP plans to invest $43 billion over the next five years to enhance the electric grid. The company aims to achieve an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and is targeting net-zero emissions by 2045.
The announcement reflects AEP's focus on both operational excellence and shareholder returns, based on a press release statement.
In other recent news, American Electric Power (AEP) reported a significant increase in second-quarter operating earnings to $1.25 per share. The company also finalized the sale of OnSite Partners to Basalt Infrastructure Partners LLC, resulting in a cash inflow of $318 million. On the analyst front, BMO Capital Markets raised its price target for AEP to $114, maintaining an Outperform rating, while BofA Securities downgraded AEP's stock from Neutral to Underperform.
AEP Ohio, an electric utility, voiced concerns over a recent settlement proposal related to infrastructure investments for data centers, which they believe does not adequately address the issues outlined in their initial application. The Public Utilities Commission of Ohio (PUCO) is currently reviewing the proposal.
In leadership changes, AEP appointed Joseph F. Moore IV as senior vice president of Business Transformation and promoted Shane Lies to Executive Vice President. Peggy Simmons was appointed as Executive Vice President of Regulatory and Chief Administrative Officer.
AEP is also exploring the sale of a minority stake in its transmission companies located in Ohio, Indiana, and Michigan. The company has secured substantial customer commitments, anticipating over 15 gigawatts of incremental load by the decade's end, largely driven by data center demand. These are the most recent developments from the company.
InvestingPro Insights
American Electric Power's recent dividend increase aligns with its strong track record of shareholder returns. According to InvestingPro data, AEP boasts a dividend yield of 3.51% and has demonstrated a dividend growth of 6.02% over the last twelve months. This is further supported by an InvestingPro Tip highlighting that AEP has raised its dividend for 14 consecutive years, underscoring the company's commitment to consistent shareholder value.
The company's financial health appears robust, with a market capitalization of $53.19 billion and a revenue of $19.52 billion over the last twelve months as of Q2 2024. AEP's profitability is evident, as noted by another InvestingPro Tip indicating that the company has been profitable over the last twelve months.
Investors might find AEP's valuation metrics intriguing. The company's P/E ratio stands at 19.97, which is relatively modest for a utility company with a strong dividend history. Moreover, an InvestingPro Tip suggests that AEP is trading at a low P/E ratio relative to its near-term earnings growth, potentially signaling an attractive entry point for value-oriented investors.
For those interested in a deeper analysis, InvestingPro offers additional tips and metrics that could provide further insights into AEP's financial position and future prospects.
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