AEP vs D: Dividend Yield, Growth & Safety Comparison
American Electric Power Co Inc (AEP) and Dominion Energy, Inc (D) are both in the Utilities sector, making them natural rivals for dividend investors. D offers a significantly higher 4.19% yield compared to AEP's 3.07%, a gap of 1.12%. For dividend growth, AEP leads with a 5-year CAGR of 13.4% versus D's 1.5%. AEP holds the edge in dividend safety with a "Safe" rating. AEP is a Dividend Contender with 16 years of consecutive increases.
Key Metrics Comparison
| Metric | AEP | D |
|---|
| Dividend Yield | 3.07% | 4.19% |
| Annual Dividend | $3.72 | $2.67 |
| 5-Year CAGR | 13.4% | 1.5% |
| Payout Ratio | 54% | 87% |
| Consecutive Years | 16 | 0 |
| Price | $129.48 | $66.31 |
Yield Comparison
Dominion Energy, Inc (D) currently yields 4.19%, which is attractive for the broader market. That's 1.12% more than American Electric Power Co Inc (AEP), which yields 3.07%. In dollar terms, D pays $2.67/share annually versus AEP's $3.72/share.
Dividend Growth
Over the past five years, AEP has grown its dividend at a 13.4% CAGR compared to D's 1.5%. AEP: Dividend growth is accelerating — the 3-year CAGR of 21.3% exceeds the 5-year rate of 13.4% and the 10-year rate of 9.1%. D: Dividend growth is slowing — the 3-year CAGR of 0.0% trails the 5-year rate of 1.5% and the 10-year rate of -0.5%.
Dividend Safety
AEP's dividend safety is rated "Safe." The payout ratio of 54% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. D's dividend safety is rated "At Risk." The payout ratio of 87% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x. AEP's payout ratio of 54% is more conservative than D's 87%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in D generates approximately $419/year in dividend income, compared to $307/year from AEP — a difference of $112/year. At $100,000, that gap widens to $1120/year.
Verdict
- Best for income: D
- Best for growth: AEP
- Best for safety: AEP
Frequently Asked Questions
Which has a higher dividend yield, AEP or D?
Dominion Energy, Inc (D) has a higher dividend yield of 4.19% compared to American Electric Power Co Inc (AEP) at 3.07%.
Is AEP or D a better dividend growth stock?
American Electric Power Co Inc has the stronger dividend growth with a 5-year CAGR of 13.4%, compared to Dominion Energy, Inc's 1.5%.
Which is safer for dividend income, AEP or D?
American Electric Power Co Inc's dividend safety is rated "Safe" while Dominion Energy, Inc is rated "At Risk." The payout ratio of 54% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. The payout ratio of 87% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x.
How much income does $10,000 in AEP vs D generate?
A $10,000 investment in AEP generates approximately $307/year in dividends, while the same amount in D generates about $419/year.
Is AEP or D a Dividend Aristocrat?
American Electric Power Co Inc is a Dividend Contender with 16 consecutive years of increases. Dominion Energy, Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, AEP or D?
American Electric Power Co Inc has a lower payout ratio of 54% compared to Dominion Energy, Inc's 87%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AEP vs D: which is better for retirement income?
It depends on your priorities. D for current income, AEP for dividend growth, AEP for safety. Many retirement investors hold both for diversification.
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