Yahoo Finance The CEO of American Electric Power explains why its stock rose during the market slump
It’s not all red on the screen.
Amid the wave of market volatility and frequency of triple digit moves in the Dow Jones Industrial Average (^DJI) since early October, one stock has emerged as an important safe-haven play: electric utility giant American Electric Power (AEP).
“Typically it’s a safe stock,” American Electric Power CEO Nick Akins told Yahoo Finance at the S&P Global Platts Energy Outlook Forum in New York. “And certainly we view the investments that we’re making, particularly in our business — transmission, generation — certainly those investments being regulated there’s a great opportunity for recovery and certainly our company continues to benefit from that.”
As of last quarter, the company boosted its dividend by 8.1% (to 67 cents per share, from 62 cents). The stock now yields 3.42%.
Year-to-date, American Electric Power shares are up 6.7%. As of October 2, prior to the aforementioned wave of market volatility, the stock was down roughly 1.5% since the start of the year. The S&P 500 (^GSPC) is up roughly 0.8% since the start of the year.
The recent stock market volatility back in October was sparked by worries about the future health of the economy and worries that the Federal Reserve is raising interest rates too quickly. While Akins isn’t sounding the alarm on a recession right now, he acknowledges that some sectors of the economy have weakened in recent months.
“Last quarter was the first quarter that we saw some of the sectors of the economy begin to be impacted and we believe that’s because of tariffs, certainly, and it’s because of the strong dollar,” he said.
Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.
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