American Electric Power Company Inc (AEP) is undervalued and Southern Company (SO) is slightly undervalued.
Against our estimates of intrinsic value, AEP trades at the wider discount: a margin of safety of +27%, against +9% for SO.
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 6.8% (average of 2 methods) values the shares at $93.38; the price of $85.15 is 9% below that value.
Leak Score 37/100 on 10 of 12 signals
| Metric | AEP | SO |
|---|---|---|
| Verdict | Undervalued | Slightly undervalued |
| Price | $120.27 | $85.15 |
| Intrinsic value | $163.79 | $93.38 |
| Margin of safety | +27% | +9% |
| Leak Score | 61/100 (10/12) | 37/100 (10/12) |
| Market cap | $65.5B | $98.0B |
| Revenue growth, 5 years | 7.9% | 7.9% |
| Operating margin | 23.3% | 24.2% |
| Net margin | 13.8% | 15.4% |
| Return on equity | 10.1% | 12.7% |
| Debt to equity | 1.67 | 1.95 |
| P/E | 20.8x | 20.6x |
| Forward P/E | 17.5x | 17.3x |
| P/B | 2.0x | 2.5x |
| Dividend yield | 3.2% | 3.6% |