SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
89.01 USD
-2.11 (-2.32%)
89.6773 USD
+0.67 (+0.75%)
We assign a fundamental rating of 4 out of 10 to SO. SO was compared to 48 industry peers in the Electric Utilities industry. There are concerns on the financial health of SO while its profitability can be described as average. 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.
In the past year SO had a positive cash flow from operations.
In the past 5 years SO has always been profitable.
Each year in the past 5 years SO had a positive operating cash flow.
1.2 Ratios
SO's Return On Assets of 2.91% is in line compared to the rest of the industry. SO outperforms 52.08% of its industry peers.
Looking at the Return On Equity, with a value of 12.74%, SO is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
The Return On Invested Capital of SO (4.62%) is better than 64.58% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SO is in line with the industry average of 4.92%.
The 3 year average ROIC (4.14%) for SO is below the current ROIC(4.62%), indicating increased profibility in the last year.
| 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 64.58% of the companies in the same industry.
In the last couple of years the Profit Margin of SO has declined.
SO's Operating Margin of 25.68% is fine compared to the rest of the industry. SO outperforms 72.92% 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 89.28%, SO is in the better half of the industry, outperforming 79.17% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SO is destroying value.
Compared to 1 year ago, SO has about the same amount of shares outstanding.
SO has about the same amout of shares outstanding than it did 5 years ago.
SO has a worse debt/assets ratio than last year.
2.2 Solvency
SO has an Altman-Z score of 0.96. 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 (0.96) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.85 is on the high side and indicates that SO has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.85, SO is doing worse than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.7
WACC6.59%
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 66.67% of the companies in the same industry.
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 70.83% 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.
The Revenue has grown by 9.40% in the past year. This is quite good.
Measured over the past years, SO shows a small growth in Revenue. The Revenue has been growing by 4.53% on average per year.
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.
The Revenue is expected to grow by 6.32% on average over the next years.
EPS Next Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.18%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
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.
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
Based on the Price/Earnings ratio of 20.94, the valuation of SO can be described as rather expensive.
66.67% of the companies in the same industry are cheaper than SO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.11, SO is valued at the same level.
A Price/Forward Earnings ratio of 18.89 indicates a rather expensive valuation of SO.
60.42% 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 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.94 | ||
| Fwd PE | 18.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 62.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.81 |
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 decent profitability rating of SO may justify a higher PE ratio.
PEG (NY)2.5
PEG (5Y)3.82
EPS Next 2Y7.72%
EPS Next 3Y7.6%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.28%.
SO's Dividend Yield is a higher than the industry average which is at 3.33.
Compared to an average S&P500 Dividend Yield of 2.32, 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 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
SO pays out 67.01% 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.
DP67.01%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
89.01
-2.11 (-2.32%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.62%
Inst Owner Change4.48%
Ins Owners0.09%
Ins Owner Change-0.86%
Market Cap98.01B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts72.12
Price Target101.57 (14.11%)
Short Float %3.48%
Short Ratio6.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP67.01%
Div Incr Years23
Div Non Decr Years34
Ex-Date
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)3.18%
PT rev (3m)3.55%
EPS NQ rev (1m)-8.25%
EPS NQ rev (3m)-6.35%
EPS NY rev (1m)0.07%
EPS NY rev (3m)0.17%
Revenue NQ rev (1m)1.18%
Revenue NQ rev (3m)-2.86%
Revenue NY rev (1m)0.26%
Revenue NY rev (3m)0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.94 | ||
| Fwd PE | 18.89 | ||
| P/S | 3.39 | ||
| P/FCF | N/A | ||
| P/OCF | 10.45 | ||
| P/B | 2.8 | ||
| P/tB | 3.32 | ||
| EV/EBITDA | 12.81 |
EPS(TTM)4.25
EY4.77%
EPS(NY)4.71
Fwd EY5.29%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.57%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.5
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 | 0.96 |
F-Score5
WACC6.59%
ROIC/WACC0.7
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 Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.18%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
Revenue Next 5Y6.32%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year84.89%
EBIT Next 3Y28.4%
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.
Can you provide the valuation status for SOUTHERN CO/THE?
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 6 / 10.
What is the valuation of SOUTHERN CO/THE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for SOUTHERN CO/THE (SO) is 20.94 and the Price/Book (PB) ratio is 2.8.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.