Is The AES Corp. overvalued or undervalued?

As of 28 February 2025, The AES Corp. has moved from a valuation grade of risky to very attractive, indicating a significant improvement in its perceived value. The company is currently considered undervalued, especially when compared to its peers. Key ratios include a P/E ratio of 10, an EV to EBITDA of 11.95, and a dividend yield of 372.12%, which is exceptionally high and suggests strong cash flow relative to its share price.
In the peer comparison, The AES Corp. stands out with a P/E ratio of 9.43, significantly lower than Vistra Corp. at 17.23 and Ameren Corp. at 21.78, both of which are considered more expensive. The EV to EBITDA ratio of 11.85 also positions The AES Corp. favorably against its peers, indicating potential for growth at a lower valuation. Despite recent underperformance relative to the S&P 500, with a YTD return of -21.13% versus the S&P's 2.44%, the current valuation metrics suggest that The AES Corp. presents a compelling investment opportunity.