American Electric Power Company Inc (AEP) is undervalued and NextEra Energy Inc (NEE) is overvalued.
Against our estimates of intrinsic value, AEP trades at the wider discount: a margin of safety of +27%, against -20% for NEE.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.5% (average of 3 methods) values the shares at $163.79; the price of $120.27 is 27% below that value, and 82% of that value comes from beyond year five.
Leak Score 61/100 on 10 of 12 signals
Discounting its cash flows at 7.7% (average of 3 methods) values the shares at $66.02; the price of $79.26 is 20% above that value, and 81% of that value comes from beyond year five.
Leak Score 33/100 on 10 of 12 signals
| Metric | AEP | NEE |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $120.27 | $79.26 |
| Intrinsic value | $163.79 | $66.02 |
| Margin of safety | +27% | -20% |
| Leak Score | 61/100 (10/12) | 33/100 (10/12) |
| Market cap | $65.5B | $165.3B |
| Revenue growth, 5 years | 7.9% | 9.2% |
| Operating margin | 23.3% | 26.8% |
| Net margin | 13.8% | 33.1% |
| Return on equity | 10.1% | 17.2% |
| Debt to equity | 1.67 | 1.93 |
| P/E | 20.8x | 17.8x |
| Forward P/E | 17.5x | 18.0x |
| P/B | 2.0x | 2.9x |
| Dividend yield | 3.2% | 3.1% |