SOUTHERN CO/THE (SO) Stock Fundamental Analysis
NYSE:SO - New York Stock Exchange, Inc. - US8425871071 - Common Stock - Currency: USD
SO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 47 industry peers in the Electric Utilities industry. While SO is still in line with the averages on profitability rating, there are concerns on its financial health. SO is valied quite expensively at the moment, while it does show a decent growth rate.
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 (3.11%) which is comparable to the rest of the industry.
The Return On Equity of SO (13.61%) is better than 74.47% of its industry peers.
The Return On Invested Capital of SO (4.64%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for SO is significantly below the industry average of 38.54%.
The 3 year average ROIC (4.14%) for SO is below the current ROIC(4.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 13.61% | ||
| ROIC | 4.64% |
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 Profit Margin of 16.54%. This is in the better half 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 26.40%. 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.
The Gross Margin of SO (89.46%) is better than 82.98% of its industry peers.
SO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.4% | ||
| PM (TTM) | 16.54% | ||
| GM | 89.46% |
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
SO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for SO remains at a similar level compared to 1 year ago.
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
SO has an Altman-Z score of 1.00. This is a bad value and indicates that SO is not financially healthy and even has some risk of bankruptcy.
SO's Altman-Z score of 1.00 is in line compared to the rest of the industry. SO outperforms 59.57% of its industry peers.
The Debt to FCF ratio of SO is 653.53, which is on the high side as it means it would take SO, 653.53 years of fcf income to pay off all of its debts.
SO has a Debt to FCF ratio of 653.53. This is comparable to the rest of the industry: SO outperforms 59.57% of its industry peers.
A Debt/Equity ratio of 1.88 is on the high side and indicates that SO has dependencies on debt financing.
SO's Debt to Equity ratio of 1.88 is on the low side compared to the rest of the industry. SO is outperformed by 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 653.53 | ||
| Altman-Z | 1 |
ROIC/WACC0.54
WACC8.61%
2.3 Liquidity
SO has a Current Ratio of 0.86. This is a bad value and indicates that SO is not financially healthy enough and could expect problems in meeting its short term obligations.
SO has a Current ratio (0.86) which is comparable to the rest of the industry.
A Quick Ratio of 0.64 indicates that SO may have some problems paying its short term obligations.
SO has a worse Quick ratio (0.64) than 63.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.79% over the past year.
SO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
The Revenue has grown by 9.58% in the past year. This is quite good.
SO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.53% yearly.
EPS 1Y (TTM)9.79%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%19.42%
Revenue 1Y (TTM)9.58%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%16.99%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.26% yearly.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.87% yearly.
EPS Next Y8.45%
EPS Next 2Y7.61%
EPS Next 3Y7.43%
EPS Next 5Y7.26%
Revenue Next Year5.55%
Revenue Next 2Y5.01%
Revenue Next 3Y4.73%
Revenue Next 5Y4.87%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.67, the valuation of SO can be described as rather expensive.
Based on the Price/Earnings ratio, SO is valued a bit more expensive than the industry average as 78.72% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.21. SO is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 19.63, which indicates a rather expensive current valuation of SO.
Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than 78.72% of the companies in the same industry.
SO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.67 | ||
| Fwd PE | 19.63 |
4.2 Price Multiples
SO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SO is more expensive than 74.47% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SO is valued a bit cheaper than the industry average as 61.70% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 966.13 | ||
| EV/EBITDA | 13.05 |
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)2.56
PEG (5Y)3.96
EPS Next 2Y7.61%
EPS Next 3Y7.43%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.28%.
SO's Dividend Yield is comparable with the industry average which is at 3.67.
Compared to an average S&P500 Dividend Yield of 2.42, SO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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 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
64.20% 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.
DP64.2%
EPS Next 2Y7.61%
EPS Next 3Y7.43%
92.3
+0.47 (+0.51%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.1%
Inst Owner Change1.44%
Ins Owners0.1%
Ins Owner Change5.38%
Market Cap101.44B
Analysts72.14
Price Target95.74 (3.73%)
Short Float %1.93%
Short Ratio4.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP64.2%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.2%
Min EPS beat(2)-4.33%
Max EPS beat(2)-0.07%
EPS beat(4)2
Avg EPS beat(4)3.82%
Min EPS beat(4)-4.33%
Max EPS beat(4)16.06%
EPS beat(8)6
Avg EPS beat(8)4.48%
EPS beat(12)9
Avg EPS beat(12)5.63%
EPS beat(16)11
Avg EPS beat(16)4.5%
Revenue beat(2)2
Avg Revenue beat(2)4.99%
Min Revenue beat(2)4.69%
Max Revenue beat(2)5.3%
Revenue beat(4)3
Avg Revenue beat(4)2.44%
Min Revenue beat(4)-3.09%
Max Revenue beat(4)5.3%
Revenue beat(8)3
Avg Revenue beat(8)-6.24%
Revenue beat(12)7
Avg Revenue beat(12)2.05%
Revenue beat(16)10
Avg Revenue beat(16)2.99%
PT rev (1m)-0.76%
PT rev (3m)1.94%
EPS NQ rev (1m)-0.62%
EPS NQ rev (3m)-12%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-0.75%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)1.24%
Revenue NY rev (3m)1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.67 | ||
| Fwd PE | 19.63 | ||
| P/S | 3.64 | ||
| P/FCF | 966.13 | ||
| P/OCF | 10.43 | ||
| P/B | 3 | ||
| P/tB | 3.58 | ||
| EV/EBITDA | 13.05 |
EPS(TTM)4.26
EY4.62%
EPS(NY)4.7
Fwd EY5.09%
FCF(TTM)0.1
FCFY0.1%
OCF(TTM)8.85
OCFY9.59%
SpS25.34
BVpS30.79
TBVpS25.8
PEG (NY)2.56
PEG (5Y)3.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 13.61% | ||
| ROCE | 5.47% | ||
| ROIC | 4.64% | ||
| ROICexc | 4.72% | ||
| ROICexgc | 4.92% | ||
| OM | 26.4% | ||
| PM (TTM) | 16.54% | ||
| GM | 89.46% | ||
| FCFM | 0.38% |
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%
ROICexcg growth 3Y6.47%
ROICexcg 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-Score6
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 653.53 | ||
| Debt/EBITDA | 4.97 | ||
| Cap/Depr | 177.66% | ||
| Cap/Sales | 34.55% | ||
| Interest Coverage | 2.85 | ||
| Cash Conversion | 76.17% | ||
| Profit Quality | 2.28% | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 1 |
F-Score6
WACC8.61%
ROIC/WACC0.54
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)9.79%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%19.42%
EPS Next Y8.45%
EPS Next 2Y7.61%
EPS Next 3Y7.43%
EPS Next 5Y7.26%
Revenue 1Y (TTM)9.58%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%16.99%
Revenue Next Year5.55%
Revenue Next 2Y5.01%
Revenue Next 3Y4.73%
Revenue Next 5Y4.87%
EBIT growth 1Y17.81%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year83.12%
EBIT Next 3Y27.71%
EBIT Next 5Y18.82%
FCF growth 1Y103.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y75.14%
OCF growth 3Y16.63%
OCF growth 5Y11.11%