AEP is a good choice within the utility sector with a 3.7% yield.

American Electric has paid out a dividend consecutively for the past 45 years and maintains a beta of 0.65, lower than the average company.

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Summary: American Electric Power’s (AEP, Financial) dividend was increased by a healthy 5%, one of the higher increases within the utility sector this year. The quarterly dividend for the December payment will be $0.59 versus the prior year rate of $0.56 per share. The overall yield is 3.7%, in line with other utility companies but above that of the S&P 500. Based upon its high yield, 3 year dividend growth rate of 5.3%, and excellent financial rating, American Electric is a solid selection within the utility sector. However, AEP does not qualify as a member of our Top 100 Dividend Stock List (see below).

The dividend will be paid at the new higher rate on December 9, 2016, to shareholders of record at close of business on November 10, 2016. American Electric Power Co., Inc. is currently priced at $63.53. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
Nov. 10 59 cents
Aug. 8 56 cents
May 6 56 cents
Feb. 8 56 cents
Nov. 6, 2015 56 cents
Aug. 6, 2015 53 cents
May 6, 2015 53 cents
Feb. 6, 2015 53 cents
Nov. 6, 2014 53 cents
Aug. 6, 2014 50 cents
May 7, 2014 50 cents
Feb. 6, 2014 50 cents
Nov. 6, 2013 50 cents
Aug. 7, 2013 49 cents
May 8, 2013 49 cents
Feb. 6, 2013 47 cents
Nov. 7, 2012 47 cents
Aug. 8, 2012 47 cents
May 8, 2012 47 cents
Feb. 8, 2012 47 cents
Nov. 8, 2011 47 cents
Aug. 8, 2011 46 cents
May 6, 2011 46 cents
Feb. 8, 2011 46 cents
Nov. 8, 2010 46 cents
Aug. 6, 2010 42 cents
May 6, 2010 42 cents
Feb. 8, 2010 41 cents

Analysis of American Electric Power is based upon our five key criteria for the Top 100 list, which include:

Category Value Score
Dividend Yield 3.72% 78
Dividend Growth (3-6 year avg.) 5.0% 308
Forward P/E 16.69 133
S&P Financial Rating A 120
Beta 0.65 50
Total Score 689

Additional Information on price-sales (P/S) ratio and historical yield.

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr low Yield %
3.72% 5.2% 4.9% 31.85 1.99 0.82 2.15 5.01% 3.22%

Final analysis

Positives

  • American Electric dividend yield is above that of the S&P 500 Index.
  • American Electric maintains a three-year dividend growth rate of 5.2%.
  • American Electric has paid out a dividend consecutively for the past 45 years.
  • American Electric maintains a beta of 0.65, lower than the average company.
  • American Electric maintains a solid investment grade rating.

Negatives

  • American Electric is trading at a forward price-earnings (P/E) ratio above the market. Additionally, its also trading at historic highs in regard to P/S ratio. From a relative valuation perspective, American Electric is overvalued.
  • American Electric's current dividend yield (3.72%) is well below its historical max dividend yield of 5.01%.

American Electric does not qualify as one of our Top 100 Dividend Stocks.

Disclosure: I have no position in American Electric.

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