SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
87.57 USD
+0.03 (+0.03%)
88.2097 USD
+0.64 (+0.73%)
We assign a fundamental rating of 4 out of 10 to SO. SO was compared to 47 industry peers in the Electric Utilities industry. SO has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, SO is valued expensive at the moment. Finally 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.
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
The Return On Assets of SO (2.91%) is comparable to the rest of the industry.
SO's Return On Equity of 12.74% is fine compared to the rest of the industry. SO outperforms 68.09% of its industry peers.
SO has a Return On Invested Capital of 4.62%. This is in the better half of the industry: SO outperforms 61.70% 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 5.04%.
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
SO has a better Profit Margin (15.42%) than 63.83% of its industry peers.
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.
SO's Operating Margin has been stable in the last couple of years.
SO has a Gross Margin of 89.28%. This is amongst the best in the industry. SO outperforms 80.85% 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.
Compared to 1 year ago, SO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.95, we must say that SO is in the distress zone and has some risk of bankruptcy.
SO has a Altman-Z score (0.95) which is in line with its industry peers.
A Debt/Equity ratio of 1.85 is on the high side and indicates that SO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.85, SO is not doing good in the industry: 87.23% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACC0.7
WACC6.63%
2.3 Liquidity
A Current Ratio of 0.75 indicates that SO may have some problems paying its short term obligations.
SO has a worse Current ratio (0.75) than 68.09% of its industry peers.
A Quick Ratio of 0.56 indicates that SO may have some problems paying its short term obligations.
The Quick ratio of SO (0.56) is worse than 72.34% of its industry peers.
| 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%.
The Earnings Per Share has been growing slightly by 5.48% on average over the past years.
The Revenue has grown by 9.40% in the past year. This is quite good.
The Revenue has been growing slightly by 4.53% on average over the past years.
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.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.32% yearly.
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
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
SO is valuated rather expensively with a Price/Earnings ratio of 20.60.
Based on the Price/Earnings ratio, SO is valued a bit more expensive than the industry average as 72.34% of the companies are valued more cheaply.
SO is valuated rather cheaply when we compare the Price/Earnings ratio to 26.77, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 18.58 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 61.70% of the companies in the same industry.
SO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.6 | ||
| Fwd PE | 18.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than 65.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SO does not grow enough to justify the current Price/Earnings ratio.
SO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.32
PEG (5Y)3.76
EPS Next 2Y7.76%
EPS Next 3Y7.68%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.40%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.02, 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 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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
67.01% of the earnings are spent on dividend by SO. 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 2Y7.76%
EPS Next 3Y7.68%
87.57
+0.03 (+0.03%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.14%
Inst Owner Change4.51%
Ins Owners0.09%
Ins Owner Change-1.53%
Market Cap96.42B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts70.3
Price Target98.38 (12.34%)
Short Float %2.32%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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)-3.14%
PT rev (3m)-0.09%
EPS NQ rev (1m)-1.19%
EPS NQ rev (3m)-8.62%
EPS NY rev (1m)0.47%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)-1.91%
Revenue NQ rev (3m)-4.81%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.6 | ||
| Fwd PE | 18.58 | ||
| P/S | 3.34 | ||
| P/FCF | N/A | ||
| P/OCF | 10.28 | ||
| P/B | 2.75 | ||
| P/tB | 3.26 | ||
| EV/EBITDA | 12.52 |
EPS(TTM)4.25
EY4.85%
EPS(NY)4.71
Fwd EY5.38%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.73%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.32
PEG (5Y)3.76
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 | 0.95 |
F-Score5
WACC6.63%
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 Y8.88%
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.
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 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 20.6 and the Price/Book (PB) ratio is 2.75.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.