SOUTHERN CO/THE (SO) Stock Fundamental Analysis
NYSE:SO - New York Stock Exchange, Inc. - US8425871071 - Common Stock - Currency: USD
Overall SO gets a fundamental rating of 5 out of 10. We evaluated SO against 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 has a correct valuation and a medium growth rate. SO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SO was profitable.
SO had a positive operating cash flow in the past year.
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
The Return On Assets of SO (3.28%) is better than 67.57% of its industry peers.
Looking at the Return On Equity, with a value of 14.18%, SO is in the better half of the industry, outperforming 78.38% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.46%, SO is in the better half of the industry, outperforming 75.68% 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 4.60%.
The 3 year average ROIC (3.85%) for SO is below the current ROIC(4.46%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.28% | ||
| ROE | 14.18% | ||
| ROIC | 4.46% |
ROA(3y)2.45%
ROA(5y)2.77%
ROE(3y)10.91%
ROE(5y)12.16%
ROIC(3y)3.85%
ROIC(5y)3.94%
1.3 Margins
The Profit Margin of SO (17.87%) is better than 83.78% of its industry peers.
SO's Profit Margin has improved in the last couple of years.
The Operating Margin of SO (26.37%) is better than 81.08% of its industry peers.
SO's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 89.36%, SO belongs to the top of the industry, outperforming 81.08% 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 | 26.37% | ||
| PM (TTM) | 17.87% | ||
| GM | 89.36% |
OM growth 3Y-3.35%
OM growth 5Y0.57%
PM growth 3Y0.94%
PM growth 5Y10.69%
GM growth 3Y-0.72%
GM growth 5Y0.44%
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.
SO has more shares outstanding than it did 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 0.97. This is a bad value and indicates that SO is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of SO (0.97) is better than 62.16% of its industry peers.
SO has a debt to FCF ratio of 92.47. This is a negative value and a sign of low solvency as SO would need 92.47 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 92.47, SO is doing good in the industry, outperforming 67.57% of the companies in the same industry.
A Debt/Equity ratio of 1.86 is on the high side and indicates that SO has dependencies on debt financing.
SO has a worse Debt to Equity ratio (1.86) than 81.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.86 | ||
| Debt/FCF | 92.47 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.66
WACC6.77%
2.3 Liquidity
SO has a Current Ratio of 0.91. 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 Current ratio of SO (0.91) is comparable to the rest of the industry.
SO has a Quick Ratio of 0.91. 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 worse Quick ratio (0.63) than 67.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
SO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.83%, which is quite impressive.
Measured over the past 5 years, SO shows a small growth in Earnings Per Share. The EPS has been growing by 3.46% on average per year.
The Revenue has been growing slightly by 0.66% in the past year.
SO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.45% yearly.
EPS 1Y (TTM)28.83%
EPS 3Y3.85%
EPS 5Y3.46%
EPS Q2Q%0.7%
Revenue 1Y (TTM)0.66%
Revenue growth 3Y7.42%
Revenue growth 5Y1.45%
Sales Q2Q%4.21%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.82% yearly.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.99% yearly.
EPS Next Y14.39%
EPS Next 2Y10.59%
EPS Next 3Y9.23%
EPS Next 5Y7.82%
Revenue Next Year-1.31%
Revenue Next 2Y1.2%
Revenue Next 3Y1.86%
Revenue Next 5Y2.99%
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
The Price/Earnings ratio is 19.99, which indicates a rather expensive current 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 64.86% of the companies listed in the same industry.
SO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.46.
A Price/Forward Earnings ratio of 18.86 indicates a rather expensive valuation of SO.
SO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SO is more expensive than 70.27% of the companies in the same industry.
SO is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.99 | ||
| Fwd PE | 18.86 |
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 62.16% 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 70.27% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 133.7 | ||
| EV/EBITDA | 12.73 |
4.3 Compensation for Growth
SO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.39
PEG (5Y)5.77
EPS Next 2Y10.59%
EPS Next 3Y9.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.50%, SO has a reasonable but not impressive dividend return.
SO's Dividend Yield is a higher than the industry average which is at 3.64.
SO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.5% |
5.2 History
The dividend of SO has a limited annual growth rate of 2.61%.
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)2.61%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
SO pays out 63.19% 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.
DP63.19%
EPS Next 2Y10.59%
EPS Next 3Y9.23%
SOUTHERN CO/THE
NYSE:SO (1/31/2025, 7:00:00 PM)
After market: 83.0893 -0.86 (-1.03%)83.95
-0.98 (-1.15%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners69.78%
Inst Owner Change-0.16%
Ins Owners0.08%
Ins Owner Change-2.21%
Market Cap91.98B
Analysts74.67
Price Target95.05 (13.22%)
Short Float %1.68%
Short Ratio4.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.5% |
Yearly Dividend2.76
Dividend Growth(5Y)2.61%
DP63.19%
Div Incr Years23
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.85%
Min EPS beat(2)3.64%
Max EPS beat(2)16.06%
EPS beat(4)4
Avg EPS beat(4)8.3%
Min EPS beat(4)3.37%
Max EPS beat(4)16.06%
EPS beat(8)8
Avg EPS beat(8)6.55%
EPS beat(12)10
Avg EPS beat(12)6.29%
EPS beat(16)13
Avg EPS beat(16)6.27%
Revenue beat(2)1
Avg Revenue beat(2)-0.1%
Min Revenue beat(2)-3.09%
Max Revenue beat(2)2.88%
Revenue beat(4)1
Avg Revenue beat(4)-6.85%
Min Revenue beat(4)-25.58%
Max Revenue beat(4)2.88%
Revenue beat(8)3
Avg Revenue beat(8)-4.01%
Revenue beat(12)7
Avg Revenue beat(12)3.27%
Revenue beat(16)9
Avg Revenue beat(16)1.76%
PT rev (1m)0.12%
PT rev (3m)6.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-18.38%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.85%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.99 | ||
| Fwd PE | 18.86 | ||
| P/S | 3.48 | ||
| P/FCF | 133.7 | ||
| P/OCF | 9.76 | ||
| P/B | 2.76 | ||
| P/tB | 3.31 | ||
| EV/EBITDA | 12.73 |
EPS(TTM)4.2
EY5%
EPS(NY)4.45
Fwd EY5.3%
FCF(TTM)0.63
FCFY0.75%
OCF(TTM)8.6
OCFY10.25%
SpS24.12
BVpS30.39
TBVpS25.37
PEG (NY)1.39
PEG (5Y)5.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.28% | ||
| ROE | 14.18% | ||
| ROCE | 5.29% | ||
| ROIC | 4.46% | ||
| ROICexc | 4.5% | ||
| ROICexgc | 4.69% | ||
| OM | 26.37% | ||
| PM (TTM) | 17.87% | ||
| GM | 89.36% | ||
| FCFM | 2.6% |
ROA(3y)2.45%
ROA(5y)2.77%
ROE(3y)10.91%
ROE(5y)12.16%
ROIC(3y)3.85%
ROIC(5y)3.94%
ROICexc(3y)3.9%
ROICexc(5y)3.99%
ROICexgc(3y)4.09%
ROICexgc(5y)4.2%
ROCE(3y)4.62%
ROCE(5y)4.71%
ROICexcg growth 3Y-1.33%
ROICexcg growth 5Y-2.28%
ROICexc growth 3Y-1.02%
ROICexc growth 5Y-2%
OM growth 3Y-3.35%
OM growth 5Y0.57%
PM growth 3Y0.94%
PM growth 5Y10.69%
GM growth 3Y-0.72%
GM growth 5Y0.44%
F-Score6
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.86 | ||
| Debt/FCF | 92.47 | ||
| Debt/EBITDA | 5.09 | ||
| Cap/Depr | 167.98% | ||
| Cap/Sales | 33.07% | ||
| Interest Coverage | 2.78 | ||
| Cash Conversion | 77.46% | ||
| Profit Quality | 14.57% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z | 0.97 |
F-Score6
WACC6.77%
ROIC/WACC0.66
Cap/Depr(3y)186.53%
Cap/Depr(5y)195.39%
Cap/Sales(3y)31.47%
Cap/Sales(5y)33.24%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)28.83%
EPS 3Y3.85%
EPS 5Y3.46%
EPS Q2Q%0.7%
EPS Next Y14.39%
EPS Next 2Y10.59%
EPS Next 3Y9.23%
EPS Next 5Y7.82%
Revenue 1Y (TTM)0.66%
Revenue growth 3Y7.42%
Revenue growth 5Y1.45%
Sales Q2Q%4.21%
Revenue Next Year-1.31%
Revenue Next 2Y1.2%
Revenue Next 3Y1.86%
Revenue Next 5Y2.99%
EBIT growth 1Y30.93%
EBIT growth 3Y3.82%
EBIT growth 5Y2.03%
EBIT Next Year92.66%
EBIT Next 3Y29.65%
EBIT Next 5Y19.01%
FCF growth 1Y148.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y54.43%
OCF growth 3Y4.1%
OCF growth 5Y1.69%