SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - NYSE:SO - US8425871071 - Common Stock
90.69 USD
-0.48 (-0.53%)
91.1999 USD
+0.51 (+0.56%)
Overall SO gets a fundamental rating of 4 out of 10. We evaluated SO against 47 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. While showing a medium growth rate, SO is valued expensive at the moment.
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.
Each year in the past 5 years SO has been profitable.
In the past 5 years SO always reported a positive cash flow from operatings.
1.2 Ratios
SO's Return On Assets of 2.91% is in line compared to the rest of the industry. SO outperforms 51.06% of its industry peers.
With a decent Return On Equity value of 12.74%, SO is doing good in the industry, outperforming 70.21% of the companies in the same industry.
The Return On Invested Capital of SO (4.62%) is better than 63.83% 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 5.02%.
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 70.21% of the companies in the same industry.
In the last couple of years the Profit Margin of SO has declined.
SO has a Operating Margin of 25.68%. This is in the better half of the industry: SO outperforms 72.34% of its industry peers.
In the last couple of years the Operating Margin of SO has remained more or less at the same level.
SO has a better Gross Margin (89.28%) than 82.98% 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
SO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SO has about the same amout of shares outstanding than it did 1 year ago.
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
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.
SO has a Altman-Z score (0.96) which is comparable to the rest of the industry.
SO has a Debt/Equity ratio of 1.85. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SO (1.85) is worse than 87.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
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.
Looking at the Current ratio, with a value of 0.75, SO is doing worse than 63.83% 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.
SO has a Quick ratio of 0.56. This is in the lower half of the industry: SO underperforms 68.09% of its industry peers.
| 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.
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
The Earnings Per Share is expected to grow by 7.15% on average over the next years.
The Revenue is expected to grow by 6.35% on average over the next years.
EPS Next Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.15%
Revenue Next Year7.63%
Revenue Next 2Y6.29%
Revenue Next 3Y5.88%
Revenue Next 5Y6.35%
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
SO is valuated rather expensively with a Price/Earnings ratio of 21.34.
Compared to the rest of the industry, the Price/Earnings ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 70.21% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.89, SO is valued at the same level.
SO is valuated rather expensively with a Price/Forward Earnings ratio of 19.25.
Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than 68.09% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SO to the average of the S&P500 Index (34.59), we can say SO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.34 | ||
| Fwd PE | 19.25 |
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 63.83% 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)2.55
PEG (5Y)3.9
EPS Next 2Y7.72%
EPS Next 3Y7.6%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.22, SO pays a bit more dividend than its industry peers.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
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.
The dividend of SO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP67.01%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
90.69
-0.48 (-0.53%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.62%
Inst Owner Change-0.61%
Ins Owners0.09%
Ins Owner Change-1.16%
Market Cap99.76B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts72.12
Price Target102.04 (12.52%)
Short Float %3.77%
Short Ratio8.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
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)3.65%
PT rev (3m)4.29%
EPS NQ rev (1m)-7.1%
EPS NQ rev (3m)-4.62%
EPS NY rev (1m)0.12%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-2.96%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)0.75%
Revenue NY rev (3m)2.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.34 | ||
| Fwd PE | 19.25 | ||
| P/S | 3.45 | ||
| P/FCF | N/A | ||
| P/OCF | 10.64 | ||
| P/B | 2.85 | ||
| P/tB | 3.38 | ||
| EV/EBITDA | 12.81 |
EPS(TTM)4.25
EY4.69%
EPS(NY)4.71
Fwd EY5.19%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.53
OCFY9.4%
SpS26.28
BVpS31.82
TBVpS26.85
PEG (NY)2.55
PEG (5Y)3.9
Graham Number55.16
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
WACC6.67%
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 Y8.37%
EPS Next 2Y7.72%
EPS Next 3Y7.6%
EPS Next 5Y7.15%
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 5Y6.35%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year84.89%
EBIT Next 3Y28.4%
EBIT Next 5Y19.8%
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 1 / 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.
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 21.34 and the Price/Book (PB) ratio is 2.85.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.