SOUTHERN CO/THE (SO)
US8425871071 - Common Stock
Taking everything into account, SO scores 5 out of 10 in our fundamental rating. SO was compared to 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. SO has a correct valuation and a medium 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.
SO had positive earnings in each of the past 5 years.
SO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SO has a Return On Assets of 3.28%. This is in the better half of the industry: SO outperforms 68.89% of its industry peers.
The Return On Equity of SO (14.18%) is better than 77.78% of its industry peers.
SO has a better Return On Invested Capital (4.46%) than 71.11% of its industry peers.
SO had an Average Return On Invested Capital over the past 3 years of 3.85%. This is in line with the industry average of 4.67%.
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
SO has a better Profit Margin (17.87%) than 86.67% 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 84.44% of its industry peers.
SO's Operating Margin has been stable in the last couple of years.
SO's Gross Margin of 89.36% is amongst the best of the industry. SO outperforms 84.44% 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) | 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.
The number of shares outstanding for SO has been increased compared to 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 0.96. This is a bad value and indicates that SO is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.96, SO perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
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.
The Debt to FCF ratio of SO (92.47) is better than 64.44% of its industry peers.
A Debt/Equity ratio of 1.86 is on the high side and indicates that SO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.86, SO is not doing good in the industry: 84.44% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.86 | ||
| Debt/FCF | 92.47 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.66
WACC6.8%
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.
SO has a Current ratio (0.91) which is in line with its industry peers.
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.
Looking at the Quick ratio, with a value of 0.63, SO is doing worse than 68.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.83% over the past year.
SO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.46% yearly.
Looking at the last year, SO shows a small growth in Revenue. The Revenue has grown by 0.66% in the last 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 7.79% yearly.
Based on estimates for the next years, SO will show a small growth in Revenue. The Revenue will grow by 2.99% on average per year.
EPS Next Y14.39%
EPS Next 2Y10.59%
EPS Next 3Y9.23%
EPS Next 5Y7.79%
Revenue Next Year-1.61%
Revenue Next 2Y1.01%
Revenue Next 3Y1.76%
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.
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 19.72.
71.11% of the companies in the same industry are cheaper than SO, based on the Price/Earnings ratio.
SO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.55, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 18.61 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 71.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.00, SO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.72 | ||
| Fwd PE | 18.61 |
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 71.11% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SO is valued a bit cheaper than 64.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 131.93 | ||
| EV/EBITDA | 12.57 |
4.3 Compensation for Growth
The 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)1.37
PEG (5Y)5.69
EPS Next 2Y10.59%
EPS Next 3Y9.23%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.52%.
SO's Dividend Yield is comparable with the industry average which is at 3.68.
Compared to an average S&P500 Dividend Yield of 2.36, SO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
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
63.19% of the earnings are spent on dividend by SO. This is not a sustainable payout ratio.
SO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP63.19%
EPS Next 2Y10.59%
EPS Next 3Y9.23%
SOUTHERN CO/THE
NYSE:SO (12/26/2024, 5:34:05 PM)
After market: 82.84 0 (0%)82.84
-0.32 (-0.38%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners69.78%
Inst Owner Change4.48%
Ins Owners0.08%
Ins Owner Change-2.92%
Market Cap90.77B
Analysts74.67
Price Target94.93 (14.59%)
Short Float %1.78%
Short Ratio4.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
Dividend Growth(5Y)2.61%
DP63.19%
Div Incr Years23
Div Non Decr Years34
Ex-Date
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)2.36%
PT rev (3m)7.86%
EPS NQ rev (1m)-1.47%
EPS NQ rev (3m)-18.38%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-0.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.85%
Revenue NY rev (1m)0.77%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.72 | ||
| Fwd PE | 18.61 | ||
| P/S | 3.43 | ||
| P/FCF | 131.93 | ||
| P/OCF | 9.63 | ||
| P/B | 2.73 | ||
| P/tB | 3.27 | ||
| EV/EBITDA | 12.57 |
EPS(TTM)4.2
EY5.07%
EPS(NY)4.45
Fwd EY5.37%
FCF(TTM)0.63
FCFY0.76%
OCF(TTM)8.6
OCFY10.39%
SpS24.12
BVpS30.39
TBVpS25.37
PEG (NY)1.37
PEG (5Y)5.69
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 | 0.96 |
F-Score6
WACC6.8%
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 5Y7.79%
Revenue 1Y (TTM)0.66%
Revenue growth 3Y7.42%
Revenue growth 5Y1.45%
Sales Q2Q%4.21%
Revenue Next Year-1.61%
Revenue Next 2Y1.01%
Revenue Next 3Y1.76%
Revenue Next 5Y2.99%
EBIT growth 1Y30.93%
EBIT growth 3Y3.82%
EBIT growth 5Y2.03%
EBIT Next Year91.78%
EBIT Next 3Y29.31%
EBIT Next 5Y18.99%
FCF growth 1Y148.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y54.43%
OCF growth 3Y4.1%
OCF growth 5Y1.69%