American Electric Power Hits 52-Week High - Analyst Blog

On April 9, 2014, shares of American Electric Power Co., Inc. AEP hit a 52-week high of $51.62 in intraday trading to finally close a notch lower at $51.54. This comes to a gain of 8.3% over the past one-year period.

American Electric Power, a Zacks Rank #2 (Buy) stock, delivered positive earnings surprises in the past two quarters. In the fourth quarter of 2013, operating earnings of 60 cents per share surpassed the Zacks Consensus Estimate by 7.1% and increased 20.0% from the year-ago level.

For full-year 2014, the company expects operating earnings in the range of $3.20 to $3.40 per share. The Zacks Consensus Estimate for the year is pegged at $3.33, reflecting a year-over-year projected improvement of 3.14%.

American Electric has focused on the expansion of its existing operations. In Jan 2014, AEP River Operations, owned by American Electric, started its new Liquids Division with the receipt of the first of 20 tank barges. The company expects to receive another 19 liquid barges in 2014. It has already started the transport of liquids from Feb. 20.

A number of new industrial expansions, slated for early 2013, were delayed until the latter half of the year. This was mirrored in the last two quarters of earnings beat. The momentum is expected to continue in 2014 as well. For this year, the company expects an additional 270 megawatts of new industrial load to come online, compensating to a large extent the loss of Ormet.  

American Electric's strong liquidity of $3.5 billion, as of Dec 31, 2013, will allow the company to distribute regular dividends. In Jan 2014, the company declared a quarterly dividend of 50 cents per share, marking the 415th consecutive quarterly common stock cash dividend of the company.

Other Stock to Consider

Other better-ranked stocks in this sector include NRG Energy, Inc. NRG, Public Service Enterprise Group Inc. PEG and Black Hills Corp. BKH. All of these stocks hold a Zacks Rank #1 (Strong Buy).