SO Fundamental Analysis - SOUTHERN CO/THE

Fundamental Rating

SO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 47 industry peers in the Electric Utilities industry. SO scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, SO is valued expensive at the moment. SO also has an excellent dividend rating.

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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 has a Return On Assets (2.88%) which is comparable to the rest of the industry.

Looking at the Return On Equity, with a value of 12.59%, SO is in the better half of the industry, outperforming 72.34% of the companies in the same industry.

The Return On Invested Capital of SO (4.53%) is better than 61.70% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for SO is in line with the industry average of 5.06%.

The 3 year average ROIC (4.14%) for SO is below the current ROIC(4.53%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	2.88%
ROE	12.59%
ROIC	4.53%

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 15.10%, SO is in the better half of the industry, outperforming 61.70% of the companies in the same industry.

SO's Profit Margin has declined in the last couple of years.

SO's Operating Margin of 25.39% is fine compared to the rest 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.

Looking at the Gross Margin, with a value of 89.14%, SO belongs to the top of the industry, outperforming 82.98% 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	25.39%
PM (TTM)	15.1%
GM	89.14%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.

Compared to 5 years ago, SO has about the same amount of shares outstanding.

The debt/assets ratio for SO is higher compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 0.98, we must say that SO is in the distress zone and has some risk of bankruptcy.

SO has a Altman-Z score of 0.98. This is comparable to the rest of the industry: SO outperforms 59.57% of its industry peers.

SO has a Debt/Equity ratio of 1.88. This is a high value indicating a heavy dependency on external financing.

SO has a Debt to Equity ratio of 1.88. This is amonst the worse of the industry: SO underperforms 89.36% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.88
Debt/FCF	N/A
Altman-Z	0.98

ROIC/WACC0.68

WACC6.68%

2.3 Liquidity

A Current Ratio of 0.74 indicates that SO may have some problems paying its short term obligations.

SO has a Current ratio of 0.74. This is in the lower half of the industry: SO underperforms 63.83% of its industry peers.

SO has a Quick Ratio of 0.74. 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's Quick ratio of 0.53 is on the low side compared to the rest of the industry. SO is outperformed by 63.83% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.74
Quick Ratio	0.53

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

SO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.63%.

The Earnings Per Share has been growing slightly by 5.48% on average over the past years.

Looking at the last year, SO shows a quite strong growth in Revenue. The Revenue has grown by 8.53% in the last year.

The Revenue has been growing slightly by 4.53% on average over the past years.

EPS 1Y (TTM)-2.63%

EPS 3Y5.99%

EPS 5Y5.48%

EPS Q2Q%-16.36%

Revenue 1Y (TTM)8.53%

Revenue growth 3Y4.96%

Revenue growth 5Y4.53%

Sales Q2Q%7.89%

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 6.73% on average per year.

SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.39% yearly.

EPS Next Y8.18%

EPS Next 2Y7.75%

EPS Next 3Y7.5%

EPS Next 5Y6.73%

Revenue Next Year6.82%

Revenue Next 2Y5.75%

Revenue Next 3Y5.32%

Revenue Next 5Y4.39%

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 stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 22.50 indicates a rather expensive valuation of SO.

Compared to the rest of the industry, the Price/Earnings ratio of SO indicates a rather expensive valuation: SO more expensive than 80.85% of the companies listed in the same industry.

SO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.06, which is the current average of the S&P500 Index.

Based on the Price/Forward Earnings ratio of 19.47, the valuation of SO can be described as rather expensive.

Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than 78.72% of the companies in the same industry.

SO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.69.

		Industry Rank	Sector Rank
PE	22.5
Fwd PE	19.47

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 70.21% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	13.18

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.

The decent profitability rating of SO may justify a higher PE ratio.

PEG (NY)2.75

PEG (5Y)4.11

EPS Next 2Y7.75%

EPS Next 3Y7.5%

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5. Dividend

5.1 Amount

SO has a Yearly Dividend Yield of 6.19%, which is a nice return.

SO's Dividend Yield is rather good when compared to the industry average which is at 4.09. SO pays more dividend than 97.87% of the companies in the same industry.

Compared to an average S&P500 Dividend Yield of 2.45, SO pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	6.19%

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

69.13% 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.

DP69.13%

EPS Next 2Y7.75%

EPS Next 3Y7.5%

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SOUTHERN CO/THE

NYSE:SO (9/5/2025, 8:04:00 PM)

After market: 92.221 +0.44 (+0.48%)

91.78

-0.09 (-0.1%)

Chartmill FA Rating

GICS SectorUtilities

GICS IndustryGroupUtilities

GICS IndustryElectric Utilities

Earnings (Last)07-31 2025-07-31/bmo

Earnings (Next)10-29 2025-10-29/amc

Inst Owners71.53%

Inst Owner Change2.91%

Ins Owners0.09%

Ins Owner Change-2.41%

Market Cap100.96B

Analysts75.17

Price Target98.47 (7.29%)

Short Float %3.14%

Short Ratio6.73

Dividend

		Industry Rank	Sector Rank
Dividend Yield	6.19%

Yearly Dividend2.69

Dividend Growth(5Y)1.87%

DP69.13%

Div Incr Years23

Div Non Decr Years34

Ex-Date08-18 2025-08-18 (0.74)

Surprises & Revisions

EPS beat(2)0

Avg EPS beat(2)-0.19%

Min EPS beat(2)-0.3%

Max EPS beat(2)-0.07%

EPS beat(4)1

Avg EPS beat(4)-0.26%

Min EPS beat(4)-4.33%

Max EPS beat(4)3.64%

EPS beat(8)5

Avg EPS beat(8)4.09%

EPS beat(12)8

Avg EPS beat(12)3.62%

EPS beat(16)10

Avg EPS beat(16)4.3%

Revenue beat(2)2

Avg Revenue beat(2)6.53%

Min Revenue beat(2)5.3%

Max Revenue beat(2)7.77%

Revenue beat(4)3

Avg Revenue beat(4)3.67%

Min Revenue beat(4)-3.09%

Max Revenue beat(4)7.77%

Revenue beat(8)4

Avg Revenue beat(8)-3.54%

Revenue beat(12)7

Avg Revenue beat(12)0.31%

Revenue beat(16)10

Avg Revenue beat(16)3.47%

PT rev (1m)0.65%

PT rev (3m)2.07%

EPS NQ rev (1m)0.59%

EPS NQ rev (3m)0.54%

EPS NY rev (1m)-0.25%

EPS NY rev (3m)-0.27%

Revenue NQ rev (1m)2.48%

Revenue NQ rev (3m)4.35%

Revenue NY rev (1m)1.51%

Revenue NY rev (3m)2.46%

Valuation

		Industry Rank	Sector Rank
PE	22.5
Fwd PE	19.47
P/S	3.56
P/FCF	N/A
P/OCF	10.95
P/B	2.97
P/tB	3.54
EV/EBITDA	13.18

EPS(TTM)4.08

EY4.45%

EPS(NY)4.71

Fwd EY5.14%

FCF(TTM)-0.98

FCFYN/A

OCF(TTM)8.38

OCFY9.13%

SpS25.78

BVpS30.92

TBVpS25.94

PEG (NY)2.75

PEG (5Y)4.11

Profitability

		Industry Rank	Sector Rank
ROA	2.88%
ROE	12.59%
ROCE	5.36%
ROIC	4.53%
ROICexc	4.57%
ROICexgc	4.76%
OM	25.39%
PM (TTM)	15.1%
GM	89.14%
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%

ROICexcg growth 3Y6.47%

ROICexcg 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-Score4

Asset Turnover0.19

Health

		Industry Rank	Sector Rank
Debt/Equity	1.88
Debt/FCF	N/A
Debt/EBITDA	5.02
Cap/Depr	185.4%
Cap/Sales	36.3%
Interest Coverage	2.78
Cash Conversion	72.29%
Profit Quality	N/A
Current Ratio	0.74
Quick Ratio	0.53
Altman-Z	0.98

F-Score4

WACC6.68%

ROIC/WACC0.68

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)-2.63%

EPS 3Y5.99%

EPS 5Y5.48%

EPS Q2Q%-16.36%

EPS Next Y8.18%

EPS Next 2Y7.75%

EPS Next 3Y7.5%

EPS Next 5Y6.73%

Revenue 1Y (TTM)8.53%

Revenue growth 3Y4.96%

Revenue growth 5Y4.53%

Sales Q2Q%7.89%

Revenue Next Year6.82%

Revenue Next 2Y5.75%

Revenue Next 3Y5.32%

Revenue Next 5Y4.39%

EBIT growth 1Y4.8%

EBIT growth 3Y10.62%

EBIT growth 5Y5.63%

EBIT Next Year84.71%

EBIT Next 3Y28.42%

EBIT Next 5Y16.78%

FCF growth 1Y63.92%

FCF growth 3YN/A

FCF growth 5YN/A

OCF growth 1Y63.97%

OCF growth 3Y16.63%

OCF growth 5Y11.11%

SOUTHERN CO/THE (SO) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

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