|Bid||98.54 x 1100|
|Ask||98.59 x 1000|
|Day's Range||98.51 - 99.15|
|52 Week Range||75.52 - 99.15|
|Beta (5Y Monthly)||0.08|
|PE Ratio (TTM)||22.89|
|Earnings Date||Feb 19, 2020|
|Forward Dividend & Yield||2.80 (2.84%)|
|Ex-Dividend Date||Nov 05, 2019|
|1y Target Est||98.73|
American Electric Power (NYSE: AEP) is among 325 companies included in the 2020 Bloomberg Gender-Equality Index (GEI), which recognizes companies that are trailblazers in their commitment to gender reporting and advancing women's equality. This is the second consecutive year AEP has been included in the index.
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like...
American Electric Power (AEP) closed the most recent trading day at $98.56, moving +1.28% from the previous trading session.
Once again, we’re heading into earnings season. All publicly traded companies are required by law to disclose their revenues, earnings, and other financial data quarterly, and the reports generally start coming in a few weeks after each calendar quarter ends. And now it’s time for the Q4 2019 reports to start coming in.Earnings season always generates a spate of analyst predictions, and this time is no different. Looking back, market watchers note that 2019 saw a series of lackluster quarters – that nevertheless did not impede stock performance. Companies compensated by reducing their forward guidance and then clearing that lower bar.So far, it seems that this is likely to happen once again. Bank of America’s securities strategists wrote, “We expect to see a 2% beat in 4Q earnings. Estimates have reset sufficiently, in our view.” At the same time, analysts are expecting stock prices to continue rising, with any pullback likely to be both shallow and short-lived.Ahead of the earnings releases, three market giants have received recent upgrades or price-target hikes from top analysts. Rating upgrades are important, as they indicate a positive change in the likely direction a stock will take – and their timing is important, too, as an upgrade shortly before an earnings release will push investor expectations. Using TipRanks' Stock Comparison tool, we lined up the three alongside each other to give us an idea of what the Street thinks is in store for the trio in the year ahead. American Electric Power (AEP)American Electric Power is one of the largest electricity providers in the country, with over 5 million customers in 11 states, some 26,000 megawatts of generating capacity, and a market cap of $47 billion. AEP is scheduled to release fourth-quarter earnings on February 20.Ahead of the print, the company is expected to show EPS of 62 cents, down 10 cents from Q4 2018. In the last three quarters, AEP has beaten the forecasts by an average of 6.7%. For the full year 2019, EPS is estimated at $4.18. In Q3 2019, the last reported, AEP showed strong results. The Q3 EPS, $1.46, was far ahead of the $1.33 predicted.Like many utilities, AEP pays out a dividend to shareholders. The 70-cent quarterly payment annualizes to $2.80, with a yield of 2.9%. This beats the average S&P yield by a wide margin, and makes the stock more attractive despite a relatively low upside potential (more below). Better for investors, the company has a history of steadily increasing the dividend, and at 48%, the payout ratio indicates both sustainability and room for further dividend growth.A reliable business base and solid earnings gave Shelby Tucker, 4-star analyst with RBC Capital, reason to upgrade his rating and price target on AEP. In his comments on the stock, Tucker pointed out the “robust rate base and earnings growth,” and noted, “We view AEP as having best value in the same peer group of quality utilities and see it trading at an improved multiple.”Tucker moved his rating up to Buy, and increased his price to $103 (from $96). His new target suggests a modest, but likely reliable, upside of 5% for the stock. (To watch Tucker’s track record, click here)All in all, American Electric has a Moderate Buy rating from the analyst consensus. This is based on 9 recent stock reviews, including 5 Buys, 3 Holds, and 1 Sell. Tucker’s upgraded Buy is the most recent of those ratings. Shares have an average price target of $97.25; this implies a minimal downside from the $98.55 trading price. (See American Electric stock analysis at TipRanks)Apple, Inc. (AAPL)Apple needs no introduction. Tim Cook's baby is a giant in every sense of the word. It is the world’s largest publicly traded company, and in summer of 2018 was the first company to every exceed a $1 trillion market cap. Apple is currently valued at $1.37 trillion. The company has a reliable – and loyal – customer base over 900 million strong, and saw over $265 billion in revenue in 2018.2019 was challenging for Apple. A series of headwinds – the US-China trade tensions, maturation of the smartphone replacement cycle, slowing iPhone sales – combined to push earnings down and forced management to seek alternate strategies to maintain revenue growth. During the year, Apple shifted toward an emphasis on its Services and Wearables segments, along with revamping the Mac and iPad lines, to compensate for the decline in iPhone sales, and that strategy is bearing fruit. Outside factors – the switch to 5G, with its concomitant necessity for customers to upgrade devices, and the apparent success of President Trump’s tariff strategy in forcing China into trade negotiations – are also looking better for Apple as 2020 opens.Q3 2019 showed that Apple’s new strategy is working. While iPhone sales were lower than expected, 18% growth in Services and 54% growth in Wearables powered an overall gain in total revenue, to $64 billion. The $3.03 EPS was 6.7% above the forecast.Looking ahead to Q4, analysts are sanguine. The final quarter is normally Apple’s strongest, and EPS is expected at $4.53. Since the December 2018 quarter, Apple has beaten earnings forecasts by increasing margins in each report.Canaccord analyst Michael Walkley sees plenty of reason for optimism as Apple gears up for its January 28 earnings release. He points out Apple’s market leading Wearables position, with strong growth in the Air Pods and Watch, and says as well, “We believe Apple’s ecosystem approach, including an installed base that exceeds 1.4B devices globally, is leading to record services revenue, and we expect the higher margin services revenue growth to continue outpacing total company growth. We are also encouraged by the strong demand for the iPhone 11 lineup and believe Apple will maintain its market share leadership of premium-tier smartphones that could be bolstered by a 5G upgrade cycle.”Walkley upgraded Apple to a Buy, and set his price target at $355, implying an upside of 11%. (To watch Walkley’s track record, click here)Overall, Apple’s 34 analyst ratings add up to a consensus view of Moderate Buy. The breakdown is 20 Buys, 11 holds, and 3 Sells. Apple’s rapid share appreciation in the past month has pushed the stock price above the average target, and the analysts have yet to adjust. Shares are selling for $318.73, while the average target is still at $296. (See Apple’s stock analysis at TipRanks)Qualcomm, Inc. (QCOM)It makes sense to talk about Qualcomm along with Apple. The chipmaker is Apple’s main supplier of smartphone modem chips, a factor that will be integral to both companies’ positioning in the global switch to 5G networks. In addition, Qualcomm and Apple ended a long-running legal battle last year with an agreed settlement that saw Qualcomm on the receiving end of a large – and undisclosed – lump sum.2019 was volatile for Qualcomm, as it was for much of the chip industry, but the company’s settlement with Apple and subsequent agreement to once again displace Intel as Apple’s prime modem chip supplier, gave the company a boost. QCOM shares ended the year with an impressive annual gain of 59%.In 2H19, QCOM saw gains when it beat earnings estimates in calendar Q3. Despite year-over-year drops, both the top and bottom lines exceeded forecasts. At the bottom line, the 78-cent EPS was well ahead of the Street’s 71-cent forecast, while the top-line $4.81 billion in revenues beat expectations by 2.3%. For calendar Q4 2019, QCOM is again expected to show a 71-cent EPS when the company reports on February 5.Canaccord’s Walkley, quoted above, looked at QCOM shares, too, and had this to say: “Given … 75 plus 5G licenses, we believe Qualcomm has a strong chance to maintain its current licensing business and is well positioned to benefit with 5G network builds ramping around the world. Further, we believe the recent Apple settlement and Samsung and LGE renegotiations protect a strong portion of Qualcomm’s long-term licensing business model.”In line with his optimism, Walkley reiterated his Buy rating on the stock and increased his price target to $115. His new price target suggests an upside potential of 20%. (To watch Walkley’s track record, click here)Qualcomm’s Moderate Buy consensus rating is based on 18 analyst reviews, including 12 Buys and 6 Holds. With shares trading for $95.91, the $99.41 average price target implies a modest upside of 4%. (See Qualcomm stock analysis at TipRanks)
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AEP (AEP) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
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The stock market has had a great 2019. Year-to-date, the S&P 500 is up about 28%. If the index were to trade flat into the end of the year, then 2019 would go down as the best year for the stock market since 2013, and the third-best year of the 2000s.But the stock market has also had a volatile 2019. Year-to-date, the S&P 500 has experienced more than 10 pullbacks of 2% or greater. By itself, that's not shocking. But what is shocking is that pretty much all of those 2% pullbacks have had the same culprit: the U.S.-China trade war.So, while I think U.S.-China trade tensions will ease going forward and the markets will consequently power higher, I also recognize that the trade war isn't over. Flare-ups will happen throughout 2020. Each one of those flare ups will be followed by a harsh stock market correction.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Hot Stocks for 2020's Big Trends Given that, I don't blame you if you want sit out all the volatility and buy safety stocks in 2020 that don't have trade war exposure. If you're in that boat, this gallery is for you. I've hand picked a group of five safety stocks to buy for their strong internal fundamentals and lack of external trade war exposure. Safety Stocks to Buy: AT&T (T)Source: Jonathan Weiss / Shutterstock.com The core reason to be attracted to telecom giant AT&T (NYSE:T) in the midst of the U.S.-China trade war is that this company provides various wireless and wired communication services which consumers in the U.S. need (and will continue to pay up for), regardless of the global trade situation. Broadly, then, no matter how the trade war plays out, AT&T's revenue and profit trends should remain relatively stable, leading to a relatively stable AT&T stock price.Further, AT&T stock has two huge catalysts on the horizon which could propel shares higher in 2020. First, there's the big mainstream 5G push, which will lead to increased demand for AT&T's wireless services at more favorable price points, as well as an increase in the number of connected devices in AT&T's wireless network. Second, there's the big streaming push with HBO Max. If that service gains healthy momentum in the streaming world, then the company will have found a cure for its cord-cutting headwinds, and the stock will benefit from multiple expansion as secular cord-cutting fears disappear -- just see what happened with Disney (NYSE:DIS) stock and Disney+.Of course, any mention of T stock as a safety stock would be incomplete without mentioning that: 1) this stock is incredibly cheap at just 11-times forward earnings, and 2) the stock also has a huge dividend yield that is north of 5%. Facebook (FB)Source: Ink Drop / Shutterstock.com Perhaps shockingly, social media giant Facebook (NASDAQ:FB) makes this list of safety stocks to buy without trade war exposure because, at its core, this company does not have much trade exposure.Facebook doesn't operate in China, so there are no levers China can pull here to hurt Facebook. Further, FB's properties will remain highly engaging in all other countries that they do operate in, regardless of the trade situation. That's because Facebook provides entertainment and communication services which consumers deem as central to their day as brushing their teeth or combing their hair. So long as consumers remain engaged, advertisers will continue to pour money into the Facebook ecosystem to chase that engagement.Sure, there's the risk that escalating trade tensions depress capital spending plans. Advertising is part of those capital spending plans. In theory, if the trade war gets really bad, Facebook ad budgets could get hit. But that has yet to happen. It's unlikely to happen anytime soon, because cutting Facebook ad budgets is something no one wants to do unless things get really ugly. Things won't get really ugly in 2020. If anything, trade conditions will improve. * 7 Retail Stocks to Buy That Dominated Thanksgiving Shopping In the big picture, then, FB stock is actually well shielded from trade war volatility. At the same time, this is a 20%-plus revenue and profit growth company trading at less than 25-times forward earnings, an attractive combination which implies minimal valuation risk and huge upside potential. American Electric Power (AEP)Source: Casimiro PT / Shutterstock.com The three big reasons to like U.S. utility company American Electric Power (NYSE:AEP) so long as the U.S.-China trade war wages on are that this company: 1) has minimal trade exposure, 2) is characterized by unparalleled stability, and 3) has attractive safety stock characteristics.American Electric Power is a U.S. utility company which provides electricity and power services to U.S. consumers. They don't operate outside of the U.S. This 100% domestic focus shields the company from international trade war noise.At the same time, the electricity and power services which AEP provides are necessary, with unwavering demand. That is, regardless of how the U.S.-China trade situation plays out, U.S. consumers will forever need and pay up for electricity and power services. Demand isn't going anywhere anytime soon. Neither are AEP's revenues or profits. This financial stability creates tremendous support for AEP share price stability.Lastly, AEP stock trades at a reasonably 21-times forward earnings multiple, has a rock solid 3% dividend yield, and is supported by stable and sizable cash flows. These ideal safety stock characteristics imply that investor demand for AEP stock during turbulent times will remain strong. Walmart (WMT)Source: Sundry Photography / Shutterstock.com Investors may be shocked to see global retail giant Walmart (NYSE:WMT) on this list. After all, Walmart does operate in the retail world, and tariffs do have a direct negative impact across the entire retail world in the form of higher input prices.Walmart is no exception here. The higher tariffs go, the higher Walmart's input costs will go, and the more that will either: 1) weigh on Walmart's margins, or 2) push up Walmart's shelf prices. But if you zoom out, it's easy to see that Walmart is actually a winner here.One of two things will happen in 2020. Either U.S.-China trade tensions will meaningfully de-escalate, or they won't. If they do, Walmart will continue to fire on all cylinders through sustained omni-channel and e-commerce expansion. If they don't, tariffs will pressure the entire retail sector. But, consumers won't stop shopping. They will just become more price-sensitive. The more price-sensitive they become, the more likely they are to shop at off-price stores, and Walmart is king in the off-price category.This is exactly why WMT stock was a huge out-performer during the last economic downturn. Consumers don't stop shopping when times get tough. They just shop smarter. * 9 Tech Stocks You Wish You'd Bought During 2019 Big picture, then, it looks like WMT stock is a strong safety stock to buy, because it will outperform regardless of which way the trade war swings. McDonald's (MCD)Source: 8th.creator / Shutterstock.com Last, but not least, on this list of safety stocks to buy without trade war exposure is global fast-casual food giant McDonald's (NYSE:MCD).The bull thesis on MCD stock as a safety stock is pretty simple. Regardless of how the trade war progresses, consumers globally still need to eat. Consequently, they will still visit McDonald's stores. Further, if trade tensions do escalate, that will cause broad consumer concern, which will in turn force consumers to become more price-sensitive. The more price-sensitive they become, the more they will cut back on costs. One way to cut back on costs? Stop going to expensive restaurants, and start going to McDonald's.As such, much like Walmart, McDonald's is supported by this fact that consumers don't stop buying things when times get tough -- they just start buying cheaper things.Also of note, tariffs have not created much noise in McDonald's financials, nor will they anytime soon. The word tariff wasn't mentioned even once during the company's most recent earnings call. Nor was the U.S.-China trade war. This lack of financial noise will help keep MCD stock shielded from trade-war-induced market volatility in 2020.As of this writing, Luke Lango was long T, FB, and WMT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post 5 Safety Stocks to Buy Without Trade War Exposure appeared first on InvestorPlace.
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