How much will American Electric Power pay in dividends this year?

To offer investors a relatively high dividend yield, American Electric Power (NASDAQ: AEP) is an attractive option for those looking to boost their passive income streams.

However, savvy investors know that it’s important to do a thorough study of higher dividend stocks, as high payouts can actually jeopardize the company’s financial health. Let’s take a closer look at what electric utility American Electric Power has in store for us with its 2024 dividend.

Dividend details

Although American Electric Power has paid quarterly dividends for 113 consecutive years, there have been periods when the dividend has remained static from year to year. Since 2010, however, the company has begun to consistently increase its dividend each year. From 2010, when it paid $1.71 per share for the full year, to 2023, when its annual payout was $3.37 per share, American Electric Power has increased its dividend at a compound annual growth rate (CAGR) of 5.3%.

In each of the first two quarters of 2024, American Electric Power paid dividends of $0.88 per share and expects to pay a total of $1.82 per share in the third and fourth quarters of the year. If American Electric Power achieves this goal, it means the company will pay approximately $1.9 billion in dividends to shareholders in 2024. As a reminder, the company paid dividends totaling $1.76 billion and $1.65 billion to shareholders in 2023 and 2022, respectively.

Why Income Investors Are So Excited About American Electric Power

For conservative investors looking to generate steady passive income, utility stocks are often considered. Because they operate largely in regulated markets, utility stocks like American Electric Power are guaranteed certain levels of earnings, allowing them to clearly anticipate future cash flows. This is evidenced by the fact that American Electric Power plans to pay dividends of $2.1 billion in 2025 and $2.2 billion in 2026, and then increase them to $2.4 billion and $2.6 billion in 2027 and 2028, respectively.

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.