American Electric Power CoAEP +0.90%78 Operating Margin % is 23.11% as of Mar. 2026, which is 14% above its 10-year median of 20.21. GuruFocus rates AEP with a GF Score™ of 78/100 and a GF Value™ of $110.98 (Modestly Overvalued). The stock has 10 warning signs investors should review. Among 499 Utilities - Regulated companies, American Electric Power Co ranks better than 76.35% on this metric.
American Electric Power Co (NAS:AEP) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
American Electric Power Co Operating Margin % Related Terms
American Electric Power Co Operating Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
American Electric Power Co Operating Margin % Chart
For the Utilities - Regulated Electric subindustry, American Electric Power Co's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
American Electric Power Co Operating Margin % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Electric Power Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where American Electric Power Co's Operating Margin % falls into.
American Electric Power Co Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
American Electric Power Co's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
American Electric Power Co (AEP) has a Operating Margin % of 23.11% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on American Electric Power Co and its competitors. This is 14% above median its historical median of 20.21. Over the past decade, American Electric Power Co's Operating Margin % has ranged from 17.00 to 24.62. According to the industry distribution chart, American Electric Power Co ranks #118 out of 499 companies in the Utilities - Regulated industry, placing it in the top 23.6%.
Is American Electric Power Co's Operating Margin % too high?
American Electric Power Co's current Operating Margin % of 23.11% is 14% above median its 10-year median of 20.21. Over the past 10 years, this metric has ranged from a low of 17.00 to a high of 24.62. The Utilities - Regulated industry median Operating Margin % is 14.97. American Electric Power Co's value of 23.11% is 54.4% above this industry median. Based on the distribution chart, American Electric Power Co ranks #118 out of 499 companies in the Utilities - Regulated industry, which is in the top quartile — a strong position relative to peers. Overall, American Electric Power Co has a GF Score™ of 78/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does American Electric Power Co's Operating Margin % compare to D and ETR?
According to the Utilities - Regulated industry distribution chart, American Electric Power Co ranks #118 out of 499 companies for Operating Margin %. This places American Electric Power Co in the top 24% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 14.97. American Electric Power Co's value of 23.11% is 54.4% above this benchmark. Historically, American Electric Power Co's own Operating Margin % has ranged from 17.00 to 24.62 over the past decade. While the company's 10-year median is 20.21 vs. the industry median of 14.97, American Electric Power Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for an Utilities - Regulated company?
The median Operating Margin % among Utilities - Regulated companies is 14.97, based on 499 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. American Electric Power Co's current Operating Margin % of 23.11% is 54.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on American Electric Power Co and its competitors. For the Utilities - Regulated industry, the median Operating Margin % is 14.97 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Electric Power Co's current Operating Margin % is 23.11%, which is 14% above median its own 10-year median of 20.21. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is American Electric Power Co stock overvalued right now?
Based on GuruFocus' analysis, American Electric Power Co (AEP) is currently considered Modestly Overvalued. The stock's GF Value™ is $110.98, compared to a current price of $134.95 — trading 21.6% above its estimated fair value. The current Operating Margin % is 23.11%, which is 14% above median its 10-year median of 20.21 and 54.4% above the Utilities - Regulated industry median of 14.97. American Electric Power Co's overall GF Score™ is 78/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For American Electric Power Co (AEP), the current Operating Margin % is 23.11% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is American Electric Power Co (AEP) Overvalued in 2026?
Based on GuruFocus' analysis, American Electric Power Co stock appears to be overvalued.
The current stock price of $134.95 is trading 21.6% above its estimated GF Value™ of $110.98.
GuruFocus considers American Electric Power Co to be Modestly Overvalued.
Key valuation signals for AEP:
Operating Margin %: 23.11% (14% above median its 10-year median of 20.21)
GF Value™: $110.98 vs. price of $134.95 (21.6% above fair value)
Industry Position: 54.4% above the Utilities - Regulated median (#118 of 499)
No single metric tells the full story. See the AEP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
American Electric Power is one of the largest regulated utilities in the United States, providing electricity generation, transmission, and distribution to more than 5 million customers in 11 states. About 39% of AEP's capacity is coal, with the remainder from a mix of natural gas (28%), renewable energy and hydro (23%), nuclear (7%), and demand response (3%). Vertically integrated utilities, transmission and distribution, and generation and marketing support earnings.
78GF Score
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