SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - NYSE:SO - US8425871071 - Common Stock
91.44 USD
+0.54 (+0.59%)
91.44 USD
0 (0%)
Taking everything into account, SO scores 4 out of 10 in our fundamental rating. SO was compared to 47 industry peers in the Electric Utilities industry. SO scores excellent on profitability, but there are concerns on its financial health. SO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SO was profitable.
SO had a positive operating cash flow in the past year.
Each year in the past 5 years SO has been profitable.
In the past 5 years SO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.91%, SO is in line with its industry, outperforming 53.19% of the companies in the same industry.
With a decent Return On Equity value of 12.74%, SO is doing good in the industry, outperforming 70.21% of the companies in the same industry.
The Return On Invested Capital of SO (4.62%) is better than 65.96% of its industry peers.
SO had an Average Return On Invested Capital over the past 3 years of 4.14%. This is in line with the industry average of 4.90%.
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's Profit Margin of 15.42% is fine compared to the rest of the industry. SO outperforms 70.21% of its industry peers.
In the last couple of years the Profit Margin of SO has declined.
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.
SO's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 89.28%, SO belongs to the best of the industry, outperforming 82.98% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SO is destroying value.
Compared to 1 year ago, SO has about the same amount of shares outstanding.
The number of shares outstanding for SO remains at a similar level compared to 5 years ago.
The debt/assets ratio for SO is higher compared to a year ago.
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.
SO's Altman-Z score of 0.96 is in line compared to the rest of the industry. SO outperforms 55.32% of its industry peers.
SO has a Debt/Equity ratio of 1.85. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.85, SO is doing worse than 87.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.69
WACC6.71%
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.
With a Current ratio value of 0.75, SO is not doing good in the industry: 61.70% of the companies in the same industry are doing better.
A Quick Ratio of 0.56 indicates that SO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.56, SO is doing worse than 63.83% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing slightly by 5.48% on average over the past years.
SO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.40%.
Measured over the past years, SO shows a small growth in Revenue. The Revenue has been growing by 4.53% on average per year.
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
Based on estimates for the next years, SO will show a small growth in Earnings Per Share. The EPS will grow by 7.15% on average per year.
Based on estimates for the next years, SO will show a small growth in Revenue. The Revenue will grow by 6.35% on average per year.
EPS Next Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.15%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
Revenue Next 5Y6.35%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 21.52, SO is valued on the expensive side.
Based on the Price/Earnings ratio, SO is valued a bit more expensive than the industry average as 72.34% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of SO to the average of the S&P500 Index (25.67), we can say SO is valued inline with the index average.
A Price/Forward Earnings ratio of 19.41 indicates a rather expensive valuation of SO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 68.09% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 31.86. SO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 19.41 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than the industry average as 61.70% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.79 |
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)2.57
PEG (5Y)3.93
EPS Next 2Y7.72%
EPS Next 3Y7.6%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.26%.
SO's Dividend Yield is a higher than the industry average which is at 3.29.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of SO has a limited annual growth rate of 1.87%.
SO has been paying a dividend for at least 10 years, so it has a reliable track record.
SO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.87%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
SO pays out 67.01% of its income as dividend. 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%
91.44
+0.54 (+0.59%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.62%
Inst Owner Change-0.62%
Ins Owners0.09%
Ins Owner Change-1.07%
Market Cap100.59B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts72.12
Price Target102.04 (11.59%)
Short Float %3.77%
Short Ratio8.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
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)3.62%
PT rev (3m)6.09%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)-0.29%
EPS NY rev (1m)0.06%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)0.35%
Revenue NQ rev (3m)2.93%
Revenue NY rev (1m)0.48%
Revenue NY rev (3m)1.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 19.41 | ||
| P/S | 3.48 | ||
| P/FCF | N/A | ||
| P/OCF | 10.73 | ||
| P/B | 2.87 | ||
| P/tB | 3.41 | ||
| EV/EBITDA | 12.79 |
EPS(TTM)4.25
EY4.65%
EPS(NY)4.71
Fwd EY5.15%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.53
OCFY9.32%
SpS26.28
BVpS31.82
TBVpS26.85
PEG (NY)2.57
PEG (5Y)3.93
Graham Number55.16
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
WACC6.71%
ROIC/WACC0.69
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 5Y7.15%
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 5Y6.35%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year84.89%
EBIT Next 3Y28.4%
EBIT Next 5Y19.8%
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 1 / 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 21.52 and the Price/Book (PB) ratio is 2.87.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.