SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
90.24 USD
+0.95 (+1.06%)
90.26 USD
+0.02 (+0.02%)
We assign a fundamental rating of 4 out of 10 to SO. SO was compared to 47 industry peers in the Electric Utilities industry. While SO has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, SO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
SO had positive earnings in the past year.
In the past year SO had a positive cash flow from operations.
In the past 5 years SO has always been profitable.
In the past 5 years SO always reported a positive cash flow from operatings.
1.2 Ratios
SO has a Return On Assets (2.91%) which is in line with its industry peers.
The Return On Equity of SO (12.74%) is better than 70.21% of its industry peers.
The Return On Invested Capital of SO (4.62%) is better than 65.96% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SO is in line with the industry average of 4.92%.
The last Return On Invested Capital (4.62%) for SO is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 12.74% | ||
| ROIC | 4.62% |
ROA(3y)2.83%
ROA(5y)2.58%
ROE(3y)12.5%
ROE(5y)11.4%
ROIC(3y)4.14%
ROIC(5y)4.02%
1.3 Margins
SO has a better Profit Margin (15.42%) than 65.96% of its industry peers.
SO's Profit Margin has declined in the last couple of years.
SO has a Operating Margin of 25.68%. This is in the better half of the industry: SO outperforms 74.47% of its industry peers.
In the last couple of years the Operating Margin of SO has remained more or less at the same level.
With an excellent Gross Margin value of 89.28%, SO belongs to the best of the industry, outperforming 80.85% of the companies in the same industry.
SO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.68% | ||
| PM (TTM) | 15.42% | ||
| GM | 89.28% |
OM growth 3Y5.39%
OM growth 5Y1.06%
PM growth 3Y16.73%
PM growth 5Y-5.73%
GM growth 3Y0.95%
GM growth 5Y0.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SO is destroying value.
The number of shares outstanding for SO remains at a similar level compared to 1 year ago.
SO has about the same amout of shares outstanding than it did 5 years ago.
SO has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.96, we must say that SO is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of SO (0.96) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.85 is on the high side and indicates that SO has dependencies on debt financing.
SO has a worse Debt to Equity ratio (1.85) than 87.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.7
WACC6.6%
2.3 Liquidity
SO has a Current Ratio of 0.75. This is a bad value and indicates that SO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of SO (0.75) is worse than 65.96% of its industry peers.
SO has a Quick Ratio of 0.75. This is a bad value and indicates that SO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.56, SO is not doing good in the industry: 70.21% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.75 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
SO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.19%.
Measured over the past 5 years, SO shows a small growth in Earnings Per Share. The EPS has been growing by 5.48% on average per year.
Looking at the last year, SO shows a quite strong growth in Revenue. The Revenue has grown by 9.40% in the last year.
SO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.53% yearly.
EPS 1Y (TTM)1.19%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%11.89%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
3.2 Future
The Earnings Per Share is expected to grow by 7.18% on average over the next years.
The Revenue is expected to grow by 6.32% on average over the next years.
EPS Next Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.18%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
Revenue Next 5Y6.32%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.23, the valuation of SO can be described as rather expensive.
Based on the Price/Earnings ratio, SO is valued a bit more expensive than 65.96% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.15, SO is valued at the same level.
The Price/Forward Earnings ratio is 19.15, which indicates a rather expensive current valuation of SO.
SO's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 36.12. SO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.23 | ||
| Fwd PE | 19.15 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 63.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.74 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SO does not grow enough to justify the current Price/Earnings ratio.
SO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.54
PEG (5Y)3.88
EPS Next 2Y7.72%
EPS Next 3Y7.6%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.34%. Purely for dividend investing, there may be better candidates out there.
SO's Dividend Yield is comparable with the industry average which is at 3.39.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
5.2 History
The dividend of SO has a limited annual growth rate of 1.87%.
SO has paid a dividend for at least 10 years, which is a reliable track record.
SO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.87%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
67.01% of the earnings are spent on dividend by SO. This is not a sustainable payout ratio.
The dividend of SO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP67.01%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
90.24
+0.95 (+1.06%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.62%
Inst Owner Change4.48%
Ins Owners0.09%
Ins Owner Change-0.72%
Market Cap99.36B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts72.12
Price Target101.57 (12.56%)
Short Float %3.48%
Short Ratio6.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP67.01%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.4%
Min EPS beat(2)-0.3%
Max EPS beat(2)3.1%
EPS beat(4)1
Avg EPS beat(4)-0.4%
Min EPS beat(4)-4.33%
Max EPS beat(4)3.1%
EPS beat(8)5
Avg EPS beat(8)3.95%
EPS beat(12)9
Avg EPS beat(12)4.23%
EPS beat(16)11
Avg EPS beat(16)4.62%
Revenue beat(2)1
Avg Revenue beat(2)3.8%
Min Revenue beat(2)-0.17%
Max Revenue beat(2)7.77%
Revenue beat(4)3
Avg Revenue beat(4)4.4%
Min Revenue beat(4)-0.17%
Max Revenue beat(4)7.77%
Revenue beat(8)4
Avg Revenue beat(8)-1.23%
Revenue beat(12)6
Avg Revenue beat(12)-1.21%
Revenue beat(16)10
Avg Revenue beat(16)3.55%
PT rev (1m)3.18%
PT rev (3m)3.82%
EPS NQ rev (1m)-6.34%
EPS NQ rev (3m)-6.52%
EPS NY rev (1m)0.07%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)0.35%
Revenue NQ rev (3m)-2.86%
Revenue NY rev (1m)0.26%
Revenue NY rev (3m)2.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.23 | ||
| Fwd PE | 19.15 | ||
| P/S | 3.44 | ||
| P/FCF | N/A | ||
| P/OCF | 10.6 | ||
| P/B | 2.84 | ||
| P/tB | 3.36 | ||
| EV/EBITDA | 12.74 |
EPS(TTM)4.25
EY4.71%
EPS(NY)4.71
Fwd EY5.22%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.44%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.54
PEG (5Y)3.88
Graham Number55.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 12.74% | ||
| ROCE | 5.44% | ||
| ROIC | 4.62% | ||
| ROICexc | 4.74% | ||
| ROICexgc | 4.94% | ||
| OM | 25.68% | ||
| PM (TTM) | 15.42% | ||
| GM | 89.28% | ||
| FCFM | N/A |
ROA(3y)2.83%
ROA(5y)2.58%
ROE(3y)12.5%
ROE(5y)11.4%
ROIC(3y)4.14%
ROIC(5y)4.02%
ROICexc(3y)4.18%
ROICexc(5y)4.06%
ROICexgc(3y)4.38%
ROICexgc(5y)4.26%
ROCE(3y)4.95%
ROCE(5y)4.79%
ROICexgc growth 3Y6.47%
ROICexgc growth 5Y1.27%
ROICexc growth 3Y6.72%
ROICexc growth 5Y1.53%
OM growth 3Y5.39%
OM growth 5Y1.06%
PM growth 3Y16.73%
PM growth 5Y-5.73%
GM growth 3Y0.95%
GM growth 5Y0.39%
F-Score5
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.91 | ||
| Cap/Depr | 193.96% | ||
| Cap/Sales | 38.74% | ||
| Interest Coverage | 2.75 | ||
| Cash Conversion | 71.04% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.75 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 0.96 |
F-Score5
WACC6.6%
ROIC/WACC0.7
Cap/Depr(3y)182.47%
Cap/Depr(5y)184.04%
Cap/Sales(3y)32.2%
Cap/Sales(5y)32.89%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.19%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%11.89%
EPS Next Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.18%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
Revenue Next 5Y6.32%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year84.89%
EBIT Next 3Y28.4%
EBIT Next 5Y19.79%
FCF growth 1Y6.85%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y33.49%
OCF growth 3Y16.63%
OCF growth 5Y11.11%
SOUTHERN CO/THE / SO FAQ
What is the fundamental rating for SO stock?
ChartMill assigns a fundamental rating of 4 / 10 to SO.
Can you provide the valuation status for SOUTHERN CO/THE?
ChartMill assigns a valuation rating of 2 / 10 to SOUTHERN CO/THE (SO). This can be considered as Overvalued.
How profitable is SOUTHERN CO/THE (SO) stock?
SOUTHERN CO/THE (SO) has a profitability rating of 7 / 10.
What is the valuation of SOUTHERN CO/THE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for SOUTHERN CO/THE (SO) is 21.23 and the Price/Book (PB) ratio is 2.84.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.