► Prefer to read?: https://dividendsandincome.com/2021/04/01/dividend-growth-stock-of-the-month-for-april-2021-american-electric-power-aep/ ► Jason Fieber's Stock Portfolio + BUY and SELL alerts: https://patreon.com/jasonfieber ► Dave Van Knapp’s Top 30 Dividend Growth Stocks for 2021: https://DaveVanKnapp.com/ ► Subscribe for new videos every day!: http://bit.ly/dai_youtube The following are ideas and affiliate offers that help support this channel: ► Buy and Hold These 3 Dividend Stocks Forever: https://yn345.isrefer.com/go/tdh36dtadvinc0321/dta/ ► #1 Fund for a Rock-Steady 8% Dividend in 2021… Paid Monthly: https://contrarianoutlook.com/members/aff/go/gregory/?i=343 ► WARNING: Avoid These Kinds of 5G Stocks Like the Plague: https://orders.investorplace.com/?cid=MKT464279&eid=MKT529316 ► Get FREE stocks (2 Stocks valued anywhere from $4-$1600): https://bit.ly/DAI-Bull American Electric Power (AEP) is a utility serving several mid-Atlantic and mid-western states. It appears to be a fine core candidate for a dividend-growth (DG) portfolio. It is a dividend growth investing stock. Could it be one of the best stocks to buy now? AEP is a solid mid-yield, mid-growth DG stock. Its 3.5% yield is acceptable for most investors, and its 5-6% growth rate per year is fine for a mid-yielding stock. Per Simply Safe Dividends, AEP’s dividend is very safe and unlikely to be cut. The safety grade was just reaffirmed in March following AEP’s most recent earnings release. From the CCC (Dividend Champions) document, we can see that AEP’s dividend increases have been quite consistent for the past decade. AEP touts its investment proposition in this slide, illustrating 3% annually from its dividend and 5-7% from annual EPS growth: AEP’s revenues have been basically flat for a decade. But that has not prevented the company from generating healthy earnings increases, as AEP has been diligent in attending to cost savings. AEP forecasts 5-7% earnings growth for the coming few years. AEP’s debt situation is fine for a utility, which tend to be capital-intensive businesses. As we saw earlier, AEP has a good investment-grade credit rating of A-, so debt is not a problem for the company. Like most utilities, AEP’s share count grows as it issues new shares to help pay fund its capital needs. AEP’s share-growth rate has been very modest. It has only 3% more shares outstanding now than it did a decade ago. It is rare to see all four models in such agreement, or for the average valuation ratio to be exactly 1.00, but there it is. For a high-quality stock such as AEP, I consider any price within +/- 10% of my calculated fair price to be “fair.” AEP’s recent price is $85. Its calculated fair price is therefore (obviously) $85 / 1.00 = $85. Allowing for the 10% cushion, we get the following outcomes: AEP’s fair price = $85 AEP’s maximum buy price = $94 CFRA’s current report on AEP shows that the average opinion grade of 19 Wall Street analysts is 3.9 on a scale of 0-5. That translates to Buy/Hold. This is a slightly positive factor. AEP’s Positives: Mid-yield (3.5%), mid-growth (6% per year) utility. Dividend growth has been steady for several years; overall streak stands at 11 years. Very good dividend safety score (81 /100 from SSD). Well-run business, with high business quality ratings from independent analysts. Good, well-balanced financials for a utility. Always profitable, with growth projected at 5-7% per year. Fairly valued. AEP’s Negatives: I don’t see any significant negatives for AEP. Conclusion: In my opinion, AEP is a classic utility in terms of how it is likely to behave as an investment. Its dividend is solid, middle of the range in both yield and growth, and very safe. It is fairly valued. In a couple weeks, when I reinvest dividends in my own Dividend Growth Portfolio, I will consider AEP as a strong candidate to start a new position and shore up my utility coverage. This is not a recommendation to buy, hold, sell, trim, or add to AEP. Any investment requires your own due diligence. Always be sure to match your stock picks to your personal financial goals. FOLLOW US: ► Website: http://www.dividendsandincome.com/ ► YouTube: http://bit.ly/dai_youtube ► Patreon: http://bit.ly/dai_patreon #BestDividendStocks #DividendStocksToBuyNow #DividendGrowthInvesting LEGAL DISCLAIMER: Please consult with a licensed investment professional before investing any of your money. Never invest in a security or idea featured on this channel unless you can afford to lose your entire investment. If your money is not FDIC insured, it may decline in value. Dave is not a licensed financial advisor, tax professional, or stockbroker and he does not purport to be. Links above may include affiliate commissions paid to the owners of Dividends and Income and help support this channel.