American Electric Power
AEPAbove valueHeld by 5 superinvestors.
SEC 10-K · fundamentals
Business quality
As of 2025-12-31Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.
- Revenue growth
- +8.7%
- Net margin
- 17.0%
- ROE
- 11.9%
- FCF margin
- 16.1%
Valuation · value band
Above fair value
Zero-growth floor
$58
Central IV
$52
Optimistic top
$59
American Electric Power (AEP): A conservative value band $58–$59 / sh (zero-growth floor to growth-capped optimistic top); central read about $52. Today’s price sits above that band (price $127 as of 2026-10-16).
The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.
- Capex doubled in two years, so maintenance is hard to pin down — read the band conservatively.
Revenue growth 0% (lower of historical trend and fundamental cap, capped by moat) · moat 0 yr · discount 14.8% · Zero-growth downside $58
Price as of 2026-10-16 · yahoo · DGS10 5.1% @ 2026-10-15.
Method & numbers
Model cautions
- Capex doubled within two years: maintenance is floored then capped at D&A (OE may look optimistic); Greenwald growth value is closed — growth credit stays in the owner-earnings DCF only.
A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.
Owner-earnings DCF $47.87 – $56.49 · Greenwald zero-growth $58.84 · zero-growth base $58.84 · reproduction $58.16
Moat Below asset base · terminal value 25% of present value · owner-earnings yield 6% vs 10Y 5.1%.
Graham earnings-power value (normalized NOPAT)$4.24 – $26.35 / sh
Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.
Years: TTM 2026-06-30, 2024, 2023, 2022, 2021
v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 191% (> 50%); estimate is degraded. Capex doubled within two years (AI-hog rule): maintenance capex floored at the D&A sustaining proxy (the growth-capex spike is not treated as maintenance). Share-based compensation is left as a real expense (not added back).
Buffett owner-earnings value$50.99 – $58.84 / sh
Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 13.0–15.0% band (9–11% base + 4.0pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).
Years: TTM 2026-06-30, 2024, 2023, 2022, 2021
v1 simplifications: Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 191% (> 50%); estimate is degraded. Capex doubled within two years (AI-hog rule): maintenance capex floored at the D&A sustaining proxy (the growth-capex spike is not treated as maintenance). One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 4.0pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 12.5 years of owner earnings, adding 4.0pp of cost-of-equity risk premium.
Reproduction value = tangible net assets $32.03B = $58.16 / sh. Tangible net assets = shareholders' equity − goodwill − intangibles, ÷ diluted shares (no R&D history to capitalize).
Moat reading: Franchise test compares earnings power (EPV) against reproduction value on both AV_conservative (tangible + capitalized R&D) and AV_reproduction (conservative + acquired-reset proxy). Both must clear the franchise multiple for a moat signal; near it, a commodity; below it, value destruction. A directional reading, not a verdict.
Growth value gated to zero — capex doubled within two years (AI-hog); growth credit stays in the owner-earnings DCF only.
Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 3% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.
Baseline 9%–11%, net debt ≈ 12.5 years of owner earnings → +4.0pp cost-of-equity premium → effective 13.0%–15.0%.
Owner-earnings DCF: growth g₁ 0% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 13.60%–16.00% (DGS10 +4.5% to a 12% strict end, each +4.00pp for leverage premium, as of 2026-10-15). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.
Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.
What the price is betting
Today's price pencils in about 18.9% a year in owner-earnings for the next few years. Revenue actually grew 7.1% a year.
The market wants it well ahead of its own track record.
Even when the value band is low-confidence: use this to see what the price assumes — not as a cheapness confirmation.
SEC 13F · holders
Superinvestors Holding This Security
5 holders · $1.29B combined · this quarter +0 opened / -0 exited
- Value$1.19BWeight (prev→now)0.6% → 0.6% ▼
- Value$59.5MWeight (prev→now)1.8% → 0.7% ▼
- Value$21.8MWeight (prev→now)0.0% → 0.1% ▲
- Value$21.3MWeight (prev→now)1.7% → 1.8% ▲
- Value$1.5MWeight (prev→now)0.0% → 0.0% ▼
SEC 13F · notes
Written summary
Written summary
American Electric Power (AEP) is held by 5 of the superinvestors tracked on Compounder, with a combined $1.29B in reported 13F value. The largest position belongs to Dodge & Cox, where it makes up 0.6% of the portfolio.
Other notable holders by value include Carl Icahn (0.7% of its book), Ray Dalio (0.1% of its book) and David Katz (1.8% of its book).
In the quarter ended 2026-06-30, 0 of the tracked filers opened a new position in AEP, 2 added to existing ones, 2 trimmed, and 0 sold out entirely.
Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. 1 investor has already filed for the quarter ended 2026-09-30. Their positions in the table reflect those newer filings, and the move counts on this page cover only 2026-06-30 filings. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.
SEC 13F · co-ownership
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Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14
Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.
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