American Electric Power (AEP) stock is currently trading at an enterprise-value-to-EBITDA valuation of 11.0x, while its five-year historical valuation is 10.0x. AEP stock seems to be trading at a premium valuation compared to its historical multiple.
AEP also appears to be trading at a premium compared to its peers, given its PE multiple. It’s currently trading at 20.0x. The largest utility by market capitalization, NextEra Energy (NEE), is trading at a PE multiple of 14.0x.
Last month’s rally
AEP showed a decent rally in the last month, rising more than 12%. However, it has fallen 3% so far this year, underperforming the broader utilities (XLU).
You can read how top stocks from the S&P 500 Utilities Index (XLU) played out in the first half of 2018 and how they are placed for the future in How Top Utility Stocks Fared in the First Half of 2018.
To learn more about US utilities, visit Market Realist’s Power Utilities page.