AEP vs EXC: Dividend Yield, Growth & Safety Comparison
American Electric Power Co Inc (AEP) and Exelon Corp (EXC) are both in the Utilities sector, making them natural rivals for dividend investors. EXC edges ahead on yield at 3.54% versus AEP's 3.07%. For dividend growth, AEP leads with a 5-year CAGR of 13.4% versus EXC's 10.0%. Both stocks carry a "Safe" dividend safety rating. AEP is a Dividend Contender with 16 years of consecutive increases.
Key Metrics Comparison
| Metric | AEP | EXC |
|---|
| Dividend Yield | 3.07% | 3.54% |
| Annual Dividend | $3.72 | $1.58 |
| 5-Year CAGR | 13.4% | 10.0% |
| Payout Ratio | 54% | 57% |
| Consecutive Years | 16 | 4 |
| Price | $129.48 | $48.38 |
Yield Comparison
Exelon Corp (EXC) currently yields 3.54%, which is solid for the broader market. That's 0.47% more than American Electric Power Co Inc (AEP), which yields 3.07%. In dollar terms, EXC pays $1.58/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 EXC's 10.0%. 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%. EXC: Dividend growth is slowing — the 3-year CAGR of 5.4% trails the 5-year rate of 10.0% and the 10-year rate of 10.0%.
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. EXC's dividend safety is rated "Safe." The payout ratio of 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. Both have similar payout ratios — AEP at 54% and EXC at 57%.
Income Comparison
A $10,000 investment in EXC generates approximately $354/year in dividend income, compared to $307/year from AEP — a difference of $47/year. At $100,000, that gap widens to $470/year.
Verdict
- Best for income: EXC
- Best for growth: AEP
Frequently Asked Questions
Which has a higher dividend yield, AEP or EXC?
Exelon Corp (EXC) has a higher dividend yield of 3.54% compared to American Electric Power Co Inc (AEP) at 3.07%.
Is AEP or EXC 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 Exelon Corp's 10.0%.
Which is safer for dividend income, AEP or EXC?
American Electric Power Co Inc's dividend safety is rated "Safe" while Exelon Corp is rated "Safe." 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 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x.
How much income does $10,000 in AEP vs EXC generate?
A $10,000 investment in AEP generates approximately $307/year in dividends, while the same amount in EXC generates about $354/year.
Is AEP or EXC a Dividend Aristocrat?
American Electric Power Co Inc is a Dividend Contender with 16 consecutive years of increases. Exelon Corp does not currently qualify for aristocrat status.
Which has a lower payout ratio, AEP or EXC?
American Electric Power Co Inc has a lower payout ratio of 54% compared to Exelon Corp's 57%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AEP vs EXC: which is better for retirement income?
It depends on your priorities. EXC for current income, AEP for dividend growth. Many retirement investors hold both for diversification.
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