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The AES Corporation (AES) vs Alphabet Inc. (GOOGL): Which Is the Better Buy in 2026?

As of 2026-06-21, AES is overvalued at $15, with a DCF intrinsic value of $7 and a margin of safety of -115%. GOOGL is overvalued at $368, with an intrinsic value of $94 and a margin of safety of -290%. Of the two, AES has the wider margin of safety.

AES
The AES Corporation
$14.62
VS
GOOGL
Alphabet Inc.
$368.03

Rewards

AES
  • ★Each dollar of retained earnings has created $11.47 of earning power — management is an exceptional capital allocator.
  • ★Trailing P/E of 7.6x is 67% below the historical average of 22.9x — potentially undervalued relative to its own history.
  • ★PEG ratio of 0.81 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
GOOGL
  • ★Alphabet Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 60.4% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Alphabet Inc. scores 89/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.

Risks

AES
  • ⚠Gross margin of 19.3% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠High leverage (2.46x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
  • ⚠Net debt/EBITDA of 8.0x indicates heavy leverage — it would take over 4 years of EBITDA to pay off net debt.
GOOGL
  • ⚠FCF yield of 1.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.

Key Valuation Metrics

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AES
GOOGL
Valuation
$-2.96B
Free Cash Flow
$73.27B
-28.44%
FCF Yield
1.63%
7.61
Trailing P/E
28.09
6.14
Forward P/E
25.39
Quality & Moat
4.20%
ROIC
20.98%
5.26%
ROE
38.88%
19.30%
Gross Margin
60.37%
0.81
PEG Ratio
1.45
Balance Sheet Safety
2.46
Net Debt / Equity
Net cash
N/A
Interest Coverage
N/A
8.03
Net Debt / EBITDA
-0.19
4.81%
Dividend Yield
0.24%
AES: 4Ties: 1GOOGL: 7
AESGOOGL

Historical Fundamentals

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AES

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

GOOGL

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

$1 Retained Earnings Test

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AES
$-6.40
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$1.41B
Δ Market Cap
$-9.02B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
GOOGL
$9.18
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$288.67B
Δ Market Cap
+$2.65T
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Discounted Cash Flow (DCF) Analysis

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AES
115.2% Overvalued
Price is 115.2% above estimated fair value
Current Price: $14.62
Fair Value: $6.79
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
GOOGL
289.6% Overvalued
Price is 289.6% above estimated fair value
Current Price: $368.03
Fair Value: $94.46
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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AES

Requires positive FCF to compute implied growth rate.

GOOGL

What growth rate is the market pricing in at $368?

+22.9%
Market-Implied FCF Growth Rate

Market pricing in significantly higher growth than history — aggressive.

Economic Moat Score

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AES
38/100
No Moat
70+ Wide · 40-69 Narrow · <40 None

No durable moat detected, though revenue predictability shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
GOOGL
89/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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AES
-2.73
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
GOOGL
-2.92
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Ownership Breakdown

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AES
Insiders 0.6%Institutions 91.5%Retail & Other 7.9%
No. of Institutional Holders992
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
GOOGL
Insiders 1.2%Institutions 80.8%Retail & Other 18.1%
No. of Institutional Holders7,266
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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AES
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
GOOGL
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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AES
0
Sells (3M)
0
Sells (12M)
No open market insider sales found.
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
GOOGL
0
Sells (3M)
0
Sells (12M)
No open market insider sales found.
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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AES
FearGreed
😐Neutral(56/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
GOOGL
FearGreed
😐Neutral(58/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

⚖️ Buffett Signal

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AES
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (56)
GOOGL
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (58)
View AES Full AnalysisView GOOGL Full Analysis

Frequently Asked Questions: AES vs GOOGL

Is The AES Corporation or Alphabet Inc. more undervalued in 2026?▼

Based on our discounted cash flow model, AES trades at a -115.2% margin of safety (intrinsic value $7 vs. price $15), compared to GOOGL's -289.6% margin of safety (intrinsic $94 vs. $368).

Which stock has a wider economic moat, The AES Corporation or Alphabet Inc.?▼

GOOGL scores 89/100 (Wide moat), while AES scores 38/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is The AES Corporation in financial distress?▼

AES's Altman Z-Score of 0.5 places it in the Distress zone, signaling elevated bankruptcy risk. GOOGL scores 2.4 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

Which company has better free cash flow, The AES Corporation or Alphabet Inc.?▼

Alphabet Inc. (GOOGL) generates a 1.6% free cash flow yield, compared to The AES Corporation's -28.4%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.

Which stock has higher return on invested capital, The AES Corporation or Alphabet Inc.?▼

GOOGL earns 21.0% ROIC versus AES's 4.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

Which dividend is safer, The AES Corporation's or Alphabet Inc.'s?▼

GOOGL's dividend earns a safety score of 88/100 (Very Safe), compared to AES's 69/100 (Safe). GOOGL has raised its dividend for 1 consecutive years.