American Electric Power Company Inc (AEP) is undervalued and National Grid Plc ADR (NGG) is overvalued.
Against our estimates of intrinsic value, AEP trades at the wider discount: a margin of safety of +27%, against -21% for NGG.
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 7.3% (average of 3 methods) values the shares at $63.55; the price of $76.86 is 21% above that value, and 82% of that value comes from beyond year five.
Leak Score 14/100 on 3 of 12 signals
| Metric | AEP | NGG |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $120.27 | $76.86 |
| Intrinsic value | $163.79 | $63.55 |
| Margin of safety | +27% | -21% |
| Leak Score | 61/100 (10/12) | 14/100 (3/12) |
| Market cap | $65.5B | $77.3B |
| Revenue growth, 5 years | 7.9% | 5.8% |
| Operating margin | 23.3% | 28.5% |
| Net margin | 13.8% | 18.3% |
| Return on equity | 10.1% | 8.6% |
| Debt to equity | 1.67 | 1.19 |
| P/E | 20.8x | 17.6x |
| Forward P/E | 17.5x | 11.7x |
| P/B | 2.0x | 1.5x |
| Dividend yield | 3.2% | 4.3% |