AES Corporation

Methodology

AES operates as independent power producer with less regulatory protection than traditional utilities, creating earnings volatility from power prices and contract structures. The mix of contracted renewables and merchant generation produces uneven cash flows. This calculation is less reliable than for regulated utilities due to commodity exposure and contract renewal risks.

Methodology

AES's PEG may appear attractive versus regulated utilities but reflects higher business risk from merchant exposure and emerging markets. Renewable transition and long-term contracts provide some visibility, but growth remains less predictable. Compare to both utilities and independent producers to gauge appropriate risk-adjusted valuation.

Methodology

AES maintains utility-competitive dividend yield despite higher risk from unregulated generation. The commitment through power market cycles appeals to income investors accepting more volatility. PEGY is relevant for those seeking utility-like income with higher growth from renewable development, though sustainability depends on contract renewals.