Business Analysis of American Electric Power

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of American Electric Power

AMERICAN ELECTRIC POWER

Business Overview

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.

American Electric Power

American Electric Power


R&P Rank: 167
Sector: Utilities
Industry:Electric Utilities
H.Q Location:Ohio
Website: www.aep.com
Company Address:
1 RIVERSIDE PLAZA, COLUMBUS OH 43215
Ph:614-716-1000

Business Analysis of American Electric Power

The Utilities Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how American Electric Power compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by American Electric Power to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of American Electric Power with an interactive chart.

  1. Revenue Growth: American Electric Power reported a revenue growth of -0.4% year-on-year during 2016. Electric Utilities Industry grew at 0.2% in the same period
  2. COGS share of Revenues: As a percentage of revenue, American Electric Power spent 66.8% of its total revenues on COGS. Electric Utilities industry average (COGS share of revenue) in the same period was 64.7%
  3. R&D share of Revenues: American Electric Power R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: American Electric Power SG&A share of Revenues details are not available because either company does not share the data or we do not have it
  5. Inventory share of Revenues: As a percentage of revenue, American Electric Power spent 5.9% of its total revenues on Inventories. Electric Utilities industry average Inventory spending in the same period was 7.6%
  6. Accounts Payable share of Revenues: As a percentage of revenue, American Electric Power invested 10.3% of its total revenues on Accounts Payable (A/P) Electric Utilities industry average Accounts Payable investment in the same period was 11.9%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, American Electric Power invested 11.7% of its total revenues on Accounts Receivable (A/R). Electric Utilities industry average Accounts Receivable investment in the same period was 14.5%
  8. PP&E share of Revenues: As a percentage of revenue, American Electric Power invested 278.6% of its total revenues on Property, Plants, and Equipments (PP&E). Electric Utilities industry average PPE investment in the same period was 286.7%
  9. Intangibles share of Revenues: As a percentage of revenue, American Electric Power invested 0.3% of its total revenues on Intangibles. Electric Utilities industry average Intangibles investment in the same period was 22.3%
  10. Net Margins: American Electric Power Net Margins in the year 2016 were 3.7%. Electric Utilities industry average Net Margins in the same period were 3.3%

Sector and Industry Association of American Electric Power

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

American Electric Power is associated with Utilities Sector and Electric Utilities Industry.

Utilities sector is comprised of the following industries: Electric Utilities; Gas, Water, & Multiutlities. The definitions for each of the industries is as follows:

  • Electric Utilities industry includes companies engaged in generation, transmission, and/or distribution of electric energy for sale.
  • Gas, Water, & Multiutlities industry includes companies engaged in transmission and/or storage of natural gas for sale and those engaged in distributing water for sale for domestic, commercial, and industrial use. It also includes companies with significant presence in more than one utility.

Industry Ranking of American Electric Power

With $16.4 billion revenues, American Electric Power ranked number 2 of all the companies in the US Electric Utilities industry. There were a total of 33 public companies in the US Electric Utilities industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Electric Utilities industry by revenues during 2016 were:

  1. Southern ($19.9 billion)
  2. American Electric Power ($16.4 billion)
  3. NextEra Energy ($16.2 billion)
  4. FirstEnergy ($14.6 billion)
  5. AES ($13.6 billion)
  6. NRG Energy ($12.4 billion)
  7. Edison International ($11.9 billion)
  8. Dominion Resources ($11.7 billion)
  9. Entergy ($10.8 billion)
  10. DTE Energy ($10.6 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of American Electric Powerand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of american-electric-power

Southern (SO) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Southern Co with $20 billion revenues in the year 2016 was the number 1 Electric Utilities company. Read this report to know the top competitors of Southern and identify growth and cost optimization opportunities of Southern

NextEra Energy (NEE) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

NextEra Energy Inc with $16 billion revenues in the year 2016 was the number 3 Electric Utilities company. Read this report to know the top competitors of NextEra Energy and identify growth and cost optimization opportunities of NextEra Energy

FirstEnergy (FE) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

FirstEnergy Corp with $15 billion revenues in the year 2016 was the number 4 Electric Utilities company. Read this report to know the top competitors of FirstEnergy and identify growth and cost optimization opportunities of FirstEnergy

AES (AES) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

AES Corp with $14 billion revenues in the year 2016 was the number 5 Electric Utilities company. Read this report to know the top competitors of AES and identify growth and cost optimization opportunities of AES

NRG Energy (NRG) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

NRG Energy, Inc. with $12 billion revenues in the year 2016 was the number 6 Electric Utilities company. Read this report to know the top competitors of NRG Energy and identify growth and cost optimization opportunities of NRG Energy

Edison International (EIX) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Edison International with $12 billion revenues in the year 2016 was the number 7 Electric Utilities company. Read this report to know the top competitors of Edison International and identify growth and cost optimization opportunities of Edison International

Revenues Analysis

American Electric Power (AEP) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of American Electric Power Co Inc (AEP) from 2012 to 2016. American Electric Power generated a total of $16.4 billion revenues during 2016. American Electric Power reported a revenue growth of -0.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in October.

American Electric Power (AEP) Revenues And Revenue Growth From 2002 To...

This report provides the last fifteen years revenues and revenue growth of American Electric Power Co Inc (AEP) from 2002 to 2016. American Electric Power generated a total of $16.4 billion revenues during 2016. American Electric Power reported a revenue growth of -0.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in October.

American Electric Power (AEP) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of American Electric Power Co Inc (AEP) revenue growth with Electric Utilities industry growth during the last five years from 2012 to 2016. American Electric Power reported a revenue growth of -0.4% year-over-year during 2016. The Electric Utilities industry growth was 0.2% year-over-year during 2016. American Electric Power growth was slower than the industry during 2016.

Profit Analysis

American Electric Power (AEP) Net Profit And Net Margin From 2012...

This report provides the last five years net profit and net margin of American Electric Power Co Inc (AEP) from 2012 to 2016. American Electric Power reported a total net income of $610.9 million during 2016. American Electric Power generated a total of $16.4 billion re