12 Best Electric Utility Stocks to Buy Now

8. American Electric Power Company, Inc. (NASDAQ:AEP)

Number of Hedge Fund Investors: 47

Revenue growth (year-over-year): 3.89%

Electricity is generated, transmitted, and distributed by American Electric Power Company, Inc. (NASDAQ:AEP) for sale to both retail and wholesale consumers.

The company reported operating earnings of $1.24 per share in Q4 2024, reflecting a 7% increase from $5.25 per share in 2023 to $5.62 per share for the full year. Commercial load expansion drove strong growth, with a 12.3% rise in Q4 of 2024 and a 10.6% gain for the entire year, mostly due to rising demand for data centers.

American Electric Power Company, Inc. (NASDAQ:AEP)’s aim to decarbonize its fleet of generators is consistent with both industry-wide trends and government pressure to lower carbon emissions. It is anticipated that this strategic focus will assist the business in several ways. The company’s proactive decarbonization strategy is expected to end up in more favorable regulatory treatment and support for investment plans as states and the federal government fight for cleaner energy.

The company anticipates serving more than 20 gigawatts of new load by the end of the decade, with an annual growth rate of 8% to 9% for total retail load from 2025 to 2027. A five-year capital plan of American Electric Power Company, Inc. (NASDAQ:AEP) worth $54 billion keeps this possibility alive as it constructs infrastructure to meet the demands of its consumers, communities, and states. Furthermore, the firm is considering $10 billion in potential incremental investment across its service territory and regional transmission networks. As a result, it is projected that the company would see growth as it makes investments in transmission infrastructure and renewable projects, driven by the utilities sector’s expansion due to grid modernization and rising energy consumption.