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 5 out of 10. The analysis compared the fundamentals against 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 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.
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
Looking at the Return On Assets, with a value of 3.03%, SO is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
SO's Return On Equity of 13.25% is amongst the best of the industry. SO outperforms 80.43% of its industry peers.
SO has a better Return On Invested Capital (4.59%) than 76.09% 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 4.69%.
The last Return On Invested Capital (4.59%) for SO is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.03% | ||
| ROE | 13.25% | ||
| ROIC | 4.59% |
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 16.47%, SO belongs to the top of the industry, outperforming 80.43% 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 (26.37%) is better than 82.61% of its industry peers.
SO's Operating Margin has been stable in the last couple of years.
The Gross Margin of SO (89.72%) is better than 82.61% 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 | 26.37% | ||
| PM (TTM) | 16.47% | ||
| GM | 89.72% |
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.
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
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.
With a decent Altman-Z score value of 0.96, SO is doing good in the industry, outperforming 69.57% of the companies in the same industry.
The Debt to FCF ratio of SO is 77.82, which is on the high side as it means it would take SO, 77.82 years of fcf income to pay off all of its debts.
SO has a better Debt to FCF ratio (77.82) than 71.74% of its industry peers.
A Debt/Equity ratio of 1.81 is on the high side and indicates that SO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.81, SO is not doing good in the industry: 63.04% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.81 | ||
| Debt/FCF | 77.82 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.67
WACC6.81%
2.3 Liquidity
A Current Ratio of 0.67 indicates that SO may have some problems paying its short term obligations.
SO has a worse Current ratio (0.67) than 60.87% of its industry peers.
SO has a Quick Ratio of 0.67. 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 Quick ratio of SO (0.46) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.54% over the past year.
The Earnings Per Share has been growing slightly by 5.48% on average over the past years.
The Revenue has been growing slightly by 5.83% in the past year.
The Revenue has been growing slightly by 4.53% on average over the past years.
EPS 1Y (TTM)11.54%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%-21.88%
Revenue 1Y (TTM)5.83%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%4.9%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.33% yearly.
Based on estimates for the next years, SO will show a small growth in Revenue. The Revenue will grow by 4.75% on average per year.
EPS Next Y8.73%
EPS Next 2Y7.69%
EPS Next 3Y7.4%
EPS Next 5Y7.33%
Revenue Next Year4.01%
Revenue Next 2Y3.94%
Revenue Next 3Y3.83%
Revenue Next 5Y4.75%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.55, which indicates a rather expensive current valuation of SO.
SO's Price/Earnings ratio is a bit more expensive when compared to the industry. SO is more expensive than 67.39% of the companies in the same industry.
SO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.63.
With a Price/Forward Earnings ratio of 20.74, SO is valued on the expensive side.
SO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SO is more expensive than 63.04% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.85, SO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.55 | ||
| Fwd PE | 20.74 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SO.
71.74% of the companies in the same industry are more expensive than SO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 120.94 | ||
| EV/EBITDA | 13.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of SO may justify a higher PE ratio.
PEG (NY)2.58
PEG (5Y)4.12
EPS Next 2Y7.69%
EPS Next 3Y7.4%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.14%.
SO's Dividend Yield is comparable with the industry average which is at 3.47.
Compared to an average S&P500 Dividend Yield of 2.51, SO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
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
SO pays out 67.12% of its income as dividend. This is not a sustainable payout ratio.
SO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP67.12%
EPS Next 2Y7.69%
EPS Next 3Y7.4%
NYSE:SO (4/22/2025, 12:19:05 PM)
91.57
+1.34 (+1.49%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners70.79%
Inst Owner Change0.43%
Ins Owners0.09%
Ins Owner Change4.99%
Market Cap100.74B
Analysts73.1
Price Target95.01 (3.76%)
Short Float %1.91%
Short Ratio3.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP67.12%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.34%
Min EPS beat(2)-4.33%
Max EPS beat(2)3.64%
EPS beat(4)3
Avg EPS beat(4)6.38%
Min EPS beat(4)-4.33%
Max EPS beat(4)16.06%
EPS beat(8)7
Avg EPS beat(8)5.52%
EPS beat(12)10
Avg EPS beat(12)5.99%
EPS beat(16)12
Avg EPS beat(16)5.39%
Revenue beat(2)1
Avg Revenue beat(2)0.8%
Min Revenue beat(2)-3.09%
Max Revenue beat(2)4.69%
Revenue beat(4)2
Avg Revenue beat(4)0.72%
Min Revenue beat(4)-3.09%
Max Revenue beat(4)4.69%
Revenue beat(8)3
Avg Revenue beat(8)-6.6%
Revenue beat(12)7
Avg Revenue beat(12)2.25%
Revenue beat(16)10
Avg Revenue beat(16)2.94%
PT rev (1m)1.15%
PT rev (3m)-0.04%
EPS NQ rev (1m)0.81%
EPS NQ rev (3m)7.74%
EPS NY rev (1m)-0.49%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)5.2%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)-0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.55 | ||
| Fwd PE | 20.74 | ||
| P/S | 3.77 | ||
| P/FCF | 120.94 | ||
| P/OCF | 10.29 | ||
| P/B | 3.03 | ||
| P/tB | 3.64 | ||
| EV/EBITDA | 13.13 |
EPS(TTM)4.06
EY4.43%
EPS(NY)4.41
Fwd EY4.82%
FCF(TTM)0.76
FCFY0.83%
OCF(TTM)8.9
OCFY9.72%
SpS24.29
BVpS30.18
TBVpS25.19
PEG (NY)2.58
PEG (5Y)4.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.03% | ||
| ROE | 13.25% | ||
| ROCE | 5.45% | ||
| ROIC | 4.59% | ||
| ROICexc | 4.63% | ||
| ROICexgc | 4.83% | ||
| OM | 26.37% | ||
| PM (TTM) | 16.47% | ||
| GM | 89.72% | ||
| FCFM | 3.12% |
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-Score7
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.81 | ||
| Debt/FCF | 77.82 | ||
| Debt/EBITDA | 4.88 | ||
| Cap/Depr | 170.05% | ||
| Cap/Sales | 33.51% | ||
| Interest Coverage | 2.78 | ||
| Cash Conversion | 79.49% | ||
| Profit Quality | 18.93% | ||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.46 | ||
| Altman-Z | 0.96 |
F-Score7
WACC6.81%
ROIC/WACC0.67
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)11.54%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%-21.88%
EPS Next Y8.73%
EPS Next 2Y7.69%
EPS Next 3Y7.4%
EPS Next 5Y7.33%
Revenue 1Y (TTM)5.83%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%4.9%
Revenue Next Year4.01%
Revenue Next 2Y3.94%
Revenue Next 3Y3.83%
Revenue Next 5Y4.75%
EBIT growth 1Y23.31%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year82.06%
EBIT Next 3Y27.66%
EBIT Next 5Y21.45%
FCF growth 1Y154.02%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y29.59%
OCF growth 3Y16.63%
OCF growth 5Y11.11%