Critical Contrast: American Electric Power (AEP) & Vistra Energy Corp. (VST)

American Electric Power (NYSE: AEP) and Vistra Energy Corp. (NYSE:VST) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Dividends

American Electric Power pays an annual dividend of $2.36 per share and has a dividend yield of 3.2%. Vistra Energy Corp. pays an annual dividend of $2.32 per share and has a dividend yield of 11.9%. American Electric Power pays out 61.8% of its earnings in the form of a dividend. American Electric Power has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for American Electric Power and Vistra Energy Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 9 5 0 2.36
Vistra Energy Corp. 0 2 7 0 2.78

American Electric Power currently has a consensus target price of $73.91, suggesting a potential downside of 0.67%. Vistra Energy Corp. has a consensus target price of $20.17, suggesting a potential upside of 3.74%. Given Vistra Energy Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe Vistra Energy Corp. is more favorable than American Electric Power.

Valuation and Earnings

This table compares American Electric Power and Vistra Energy Corp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Electric Power $15.95 billion 2.29 $5.12 billion $3.82 19.48
Vistra Energy Corp. $5.53 billion 1.50 $1.55 billion N/A N/A

American Electric Power has higher revenue and earnings than Vistra Energy Corp..

Insider and Institutional Ownership

71.8% of American Electric Power shares are owned by institutional investors. 0.2% of American Electric Power shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares American Electric Power and Vistra Energy Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Electric Power 12.21% 9.67% 2.73%
Vistra Energy Corp. N/A N/A N/A

Summary

American Electric Power beats Vistra Energy Corp. on 9 of the 14 factors compared between the two stocks.

American Electric Power Company Profile

American Electric Power Company, Inc. (AEP) is a public utility holding company that owns, directly or indirectly, all of the outstanding common stock of its public utility subsidiaries and varying percentages of other subsidiaries. The service areas of the Company’s public utility subsidiaries cover the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The Company’s segments include Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing. AEP’s vertically integrated utility operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers. Transmission and Distribution Utilities segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers. AEP Transmission Holdco develops, constructs and operates transmission facilities.

Vistra Energy Corp. Company Profile

Vistra Energy Corp, formerly TCEH Corp. is a holding company. The Company is an energy company, which is focused on energy and power generation markets through operation as a generator and retailer of electricity in Texas market. Its portfolio of businesses consists primarily of Luminant and TXU Energy. It is engaged in electricity market activities in Texas, including electricity generation, wholesale energy sales and purchases, commodity risk management activities and retail electricity operations. Luminant generates and sells electricity and related products from its fleet of generation facilities totaling approximately 17,000 megawatts of generation in Texas, including 2,300 megawatts fueled by nuclear power, 8,000 megawatts fueled by coal and 6,000 megawatts fueled by natural gas. The Company is a purchaser of wind-generated electricity. TXU Energy sells retail electricity and services to approximately 1.7 million residential and business customers in Texas.

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