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Holly LaFon
Holly LaFon
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Mario Gabelli Comments on American Electric Power Co. Inc.

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February 04, 2019 | About:
American Electric Power Co. Inc. (NYSE:AEP)(2.7%) (AEP – $74.74 – NYSE) is one of the nation’s largest electric utilities. It serves more than 5.4 million retail customers in eleven states (Ohio and Texas are the largest), owns approximately 26 GW of generating capacity, 40,000 miles of transmission lines (the nation’s largest), and 223,000 miles of distribution lines. Following non-regulated power plant sales, AEP is focused on the regulated utility business, with plans to invest nearly $33 billion over the 2019-2023 time period in regulated assets, including 75% in transmission and distribution, and contracted renewable power. Management expects 5%-7% annual earnings growth from $3.85 per share (2018 earnings estimate) driven by capital investment and rate recovery, and sustainable cost controls. AEP Transco, a transmission development subsidiary, expects to grow earnings to $1.01-$1.04 per share by 2020 from $0.16 per AEP share in 2013, driven by a $4.5 billion transmission capital investment plan for 2018-2019. AEP currently pays an annual dividend of $2.68 per share, representing a payout ratio of roughly 70% or $3.85 per share.

From Mario Gabelli (Trades, Portfolio)'s Gabelli Utilities Fund fourth-quarter 2018 commentary.

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Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

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