American Electric Power (AEP), one of the largest electric utilities in the US, has improved its 2015 operating earnings guidance to a range of $3.40-3.60 from a previous projection of $3.30-3.60 per share. For 2016, the company reaffirmed its guidance in a band of $3.45-3.85 per share. As for its capital expenditure budget, AEP expects capital investment of $4.4 bn for 2015, $3.8 bn for 2016 and finally around $3.9 bn for 2017. Our outlook for AEP remains optimistic, as the company’s ongoing massive investments in transmission projects and in regulated as well as non-regulated businesses are set to drive its earnings in the future. AEP also aims to concentrate on process improvement in order to minimize operational costs. In addition, economic improvement in its service territories – mainly in areas with shale gas development – is encouraging. Overall industrial sales increased 5% in the third quarter. This marks the fourth consecutive quarter of positive industrial sales growth. I also note that earlier AEP increase its quarterly dividend by 6% to 53 cents per share, which implies impressive indicated dividend yield of 3.6%. With target price of $62, AEP’s shares, I think, are attractive for medium-term investment, especially for dividend-seeking investors. $AEP, American Electric Power Company, Inc. / 1440