Using the PEG framework with analyst consensus forward EPS growth of 9.1% plus 2.9% dividend yield, American Electric Power Company, Inc. has a fair value of $57.47 based on NTM EPS (FY2026) of $6.34. The current PEG ratio is 2.24.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 6.2% |
| Dividend Yield | +2.9% |
| Adjusted Growth (clamped 8–25%) | 9.1% |
| Fair P/E | 9.1x |
| NTM EPS (FY2026) | $6.34 |
| Fair Value | $57.47 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $6.66 | — | — |
| FY2026E | $6.34 | -4.8% | 10 |
| FY2027E | $6.84 | +7.9% | 10 |
| FY2028E | $7.52 | +10.0% | 10 |
| FY2029E | $8.24 | +9.6% | 5 |
| FY2030E | $8.99 | +9.1% | 5 |
5Y Forward EPS CAGR: 6.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $2.5B | $4.96 | — |
| FY2022 | $2.3B | $4.49 | -9.5% |
| FY2023 | $2.2B | $4.24 | -5.6% |
| FY2024 | $3.0B | $5.58 | +31.6% |
| FY2025 | $3.6B | $6.66 | +19.4% |
4Y Historical EPS CAGR: 7.6%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.