SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
87.01 USD
-0.21 (-0.24%)
87.01 USD
0 (0%)
Taking everything into account, SO scores 4 out of 10 in our fundamental rating. SO was compared to 46 industry peers in the Electric Utilities industry. While SO belongs to the best of the industry regarding profitability, there are concerns on its financial health. SO is quite expensive at the moment. It does show a decent growth rate. Finally SO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SO was profitable.
In the past year SO had a positive cash flow from operations.
SO had positive earnings in each of the past 5 years.
Each year in the past 5 years SO had a positive operating cash flow.
1.2 Ratios
SO has a Return On Assets (2.91%) which is comparable to the rest of the industry.
SO has a better Return On Equity (12.74%) than 67.39% of its industry peers.
With a decent Return On Invested Capital value of 4.62%, SO is doing good in the industry, outperforming 65.22% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SO 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
SO has a better Profit Margin (15.42%) than 63.04% 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 71.74% 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 80.43% 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.
SO has about the same amout of shares outstanding than it did 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 0.94. This is a bad value and indicates that SO is not financially healthy and even has some risk of bankruptcy.
SO has a Altman-Z score (0.94) which is in line with its industry peers.
SO has a Debt/Equity ratio of 1.85. This is a high value indicating a heavy dependency on external financing.
SO's Debt to Equity ratio of 1.85 is on the low side compared to the rest of the industry. SO is outperformed by 84.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACC0.69
WACC6.67%
2.3 Liquidity
A Current Ratio of 0.75 indicates that SO may have some problems paying its short term obligations.
SO's Current ratio of 0.75 is on the low side compared to the rest of the industry. SO is outperformed by 65.22% of its industry peers.
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 69.57% 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%.
SO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
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
Based on estimates for the next years, SO will show a small growth in Earnings Per Share. The EPS will grow by 7.18% on average per year.
Based on estimates for the next years, SO will show a small growth in Revenue. The Revenue will grow by 6.32% on average per year.
EPS Next Y8.88%
EPS Next 2Y7.76%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue Next Year8.18%
Revenue Next 2Y6.59%
Revenue Next 3Y6.04%
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
A Price/Earnings ratio of 20.47 indicates a rather expensive valuation of SO.
Compared to the rest of the industry, the Price/Earnings ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 67.39% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.19. SO is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 18.46, SO is valued on the expensive side.
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 60.87% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of SO to the average of the S&P500 Index (23.88), we can say SO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 18.46 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than 63.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.31
PEG (5Y)3.74
EPS Next 2Y7.76%
EPS Next 3Y7.68%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.39%.
Compared to an average industry Dividend Yield of 3.05, SO pays a bit more dividend than its industry peers.
SO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.39% |
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
67.01% of the earnings are spent on dividend by SO. This is not a sustainable payout ratio.
SO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP67.01%
EPS Next 2Y7.76%
EPS Next 3Y7.68%
87.01
-0.21 (-0.24%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.2%
Inst Owner Change0%
Ins Owners0.09%
Ins Owner Change-1.53%
Market Cap95.81B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts70.3
Price Target98.38 (13.07%)
Short Float %2.32%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.39% |
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)-3.14%
PT rev (3m)-0.09%
EPS NQ rev (1m)-1.1%
EPS NQ rev (3m)-8.62%
EPS NY rev (1m)0.15%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)-4.81%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 18.46 | ||
| P/S | 3.31 | ||
| P/FCF | N/A | ||
| P/OCF | 10.22 | ||
| P/B | 2.74 | ||
| P/tB | 3.24 | ||
| EV/EBITDA | 12.49 |
EPS(TTM)4.25
EY4.88%
EPS(NY)4.71
Fwd EY5.42%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.79%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.31
PEG (5Y)3.74
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 | 0.94 |
F-Score5
WACC6.67%
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 2Y7.76%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
Revenue Next Year8.18%
Revenue Next 2Y6.59%
Revenue Next 3Y6.04%
Revenue Next 5Y6.32%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year87.46%
EBIT Next 3Y30.06%
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.
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%.