American Electric Power Co. Inc. (AEP): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are downgrading our recommendation on American Electric Power Company, Inc. to Neutral from Outperform following its lower-than-expected third-quarter results. However, ongoing investments in transmission projects and regulated, as well as non-regulated, businesses are set to drive its earnings in the future. Moreover, the company will benefit from attractive growth opportunities in the shale-rich regions of Texas and Ohio. The company focuses on providing reliable services to its customers through technological improvements. The company is equally focused on maximizing shareholder value.


Overview:

Columbus, OH-based American Electric Power Company, Inc. is a public utility holding company which, through directly and indirectly owned subsidiaries, generates, transmits and distributes electricity, natural gas and other commodities. The company is one of the largest integrated utilities in the U.S., serving more than 5 million customers in 11 states with nearly 38,000 MW of generating capacity and nearly 40,000 miles of electricity transmission system network. Its service area covers Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The company derives its revenues mainly from power generation. Approximately 60% of the company's power is generated from coal, 23% from natural gas and oil, 5% from nuclear energy, and the remaining 12% from wind, water, pumped storage and other sources.

The company mainly operates under the following business segments: Utility Operations, Transmission Operations, AEP River Operations, and Generation and Marketing.

American Electric Power's public utility subsidiaries are Appalachian Power Company (APCo), Columbus Southern Power Company (CSPCo), Indiana Michigan Power Company (I&M), Kentucky Power Company (KPCo), Kingsport Power Company (KgPCo), Ohio Power Company (OPCo), Public Service Company of Oklahoma (PSO), Southwestern Electric Power Company (SWEPCo), AEP Texas Central Company (TCC), AEP Texas North Company (TNC), Wheeling Power Company (WPCo) and AEP Generating Company (AEGCo).

American Electric Power also owns a service company subsidiary, American Electric Power Service Corporation (AEPSC). AEPSC provides accounting, administrative, information systems, engineering, financial, legal, maintenance and other services.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: PSO , TCC , TNC , AEP

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