SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
88.8 USD
-0.1 (-0.11%)
We assign a fundamental rating of 4 out of 10 to SO. SO was compared to 46 industry peers in the Electric Utilities industry. While SO has a great profitability rating, there are quite some concerns on its financial health. SO is valied quite expensively at the moment, while it does show a decent growth rate. SO also has an excellent dividend rating.
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.
- SO had positive earnings in each of the past 5 years.
- SO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- SO has a Return On Assets (2.91%) which is comparable to the rest of the industry.
- With a decent Return On Equity value of 12.74%, SO is doing good in the industry, outperforming 67.39% of the companies in the same industry.
- SO has a better Return On Invested Capital (4.62%) than 65.22% 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 4.58%.
- 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
- Looking at the Profit Margin, with a value of 15.42%, SO is in the better half of the industry, outperforming 63.04% of the companies in the same industry.
- In the last couple of years the Profit Margin of SO has declined.
- The Operating Margin of SO (25.68%) is better than 71.74% of its industry peers.
- SO's Operating Margin has been stable in the last couple of years.
- SO's Gross Margin of 89.28% is amongst the best of the industry. SO outperforms 80.43% of its industry peers.
- In the last couple of years the Gross Margin of SO has remained more or less at the same level.
| 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.
- SO has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, SO has about the same amount of shares outstanding.
- The debt/assets ratio for SO is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.95, we must say that SO is in the distress zone and has some risk of bankruptcy.
- SO has a Altman-Z score (0.95) which is in line with its industry peers.
- 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 84.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACC0.69
WACC6.73%
2.3 Liquidity
- A Current Ratio of 0.75 indicates that SO may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.75, SO is doing worse than 65.22% of the companies in the same industry.
- 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: 69.57% 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
- The Earnings Per Share has been growing slightly by 1.19% over the past year.
- 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%.
- 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 7.36% on average over the next years.
- The Revenue is expected to grow by 6.66% on average over the next years.
EPS Next Y8.88%
EPS Next 2Y7.77%
EPS Next 3Y7.68%
EPS Next 5Y7.36%
Revenue Next Year7.91%
Revenue Next 2Y6.46%
Revenue Next 3Y5.96%
Revenue Next 5Y6.66%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 20.89 indicates a rather expensive valuation of SO.
- Based on the Price/Earnings ratio, SO is valued a bit more expensive than the industry average as 65.22% of the companies are valued more cheaply.
- Compared to an average S&P500 Price/Earnings ratio of 27.38, SO is valued a bit cheaper.
- Based on the Price/Forward Earnings ratio of 18.83, the valuation of SO can be described as rather expensive.
- 60.87% of the companies in the same industry are cheaper than SO, based on the Price/Forward Earnings ratio.
- SO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.89 | ||
| Fwd PE | 18.83 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than the industry average as 63.04% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.63 |
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)2.35
PEG (5Y)3.82
EPS Next 2Y7.77%
EPS Next 3Y7.68%
5. Dividend
5.1 Amount
- SO has a Yearly Dividend Yield of 3.33%. Purely for dividend investing, there may be better candidates out there.
- SO's Dividend Yield is a higher than the industry average which is at 2.93.
- Compared to an average S&P500 Dividend Yield of 1.84, SO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
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 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 2Y7.77%
EPS Next 3Y7.68%
NYSE:SO (1/20/2026, 12:58:08 PM)
88.8
-0.1 (-0.11%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)10-30 2025-10-30/bmo
Earnings (Next)02-19 2026-02-19/amc
Inst Owners74.2%
Inst Owner Change-0.05%
Ins Owners0.09%
Ins Owner Change-1.53%
Market Cap97.78B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts70
Price Target98.38 (10.79%)
Short Float %2.43%
Short Ratio4.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP67.01%
Div Incr Years23
Div Non Decr Years34
Ex-DateN/A
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)-2.77%
PT rev (3m)-0.06%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.5%
EPS NY rev (1m)0%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.81%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.89 | ||
| Fwd PE | 18.83 | ||
| P/S | 3.38 | ||
| P/FCF | N/A | ||
| P/OCF | 10.43 | ||
| P/B | 2.79 | ||
| P/tB | 3.31 | ||
| EV/EBITDA | 12.63 |
EPS(TTM)4.25
EY4.79%
EPS(NY)4.72
Fwd EY5.31%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.59%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.35
PEG (5Y)3.82
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 | 0.95 |
F-Score5
WACC6.73%
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 Y8.88%
EPS Next 2Y7.77%
EPS Next 3Y7.68%
EPS Next 5Y7.36%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
Revenue Next Year7.91%
Revenue Next 2Y6.46%
Revenue Next 3Y5.96%
Revenue Next 5Y6.66%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year87.46%
EBIT Next 3Y30.06%
EBIT Next 5Y20.12%
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.
What is the valuation status of SOUTHERN CO/THE (SO) stock?
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.
Can you provide the financial health for SO stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.
Can you provide the dividend sustainability for SO stock?
The dividend rating of SOUTHERN CO/THE (SO) is 7 / 10 and the dividend payout ratio is 67.01%.