SOUTHERN CO/THE (SO) Stock Fundamental Analysis
NYSE:SO - New York Stock Exchange, Inc. - US8425871071 - Common Stock - Currency: USD
Taking everything into account, SO scores 4 out of 10 in our fundamental rating. SO was compared to 46 industry peers in the Electric Utilities industry. SO has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, SO is valued expensive at the moment.
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.
In the past 5 years SO always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 3.11%, SO perfoms like the industry average, outperforming 52.17% of the companies in the same industry.
SO has a better Return On Equity (13.61%) than 73.91% of its industry peers.
With a decent Return On Invested Capital value of 4.64%, SO is doing good in the industry, outperforming 60.87% of the companies in the same industry.
SO had an Average Return On Invested Capital over the past 3 years of 4.14%. This is significantly below the industry average of 40.10%.
The last Return On Invested Capital (4.64%) for SO is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 13.61% | ||
| ROIC | 4.64% |
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
The Profit Margin of SO (16.54%) is better than 69.57% of its industry peers.
In the last couple of years the Profit Margin of SO has declined.
Looking at the Operating Margin, with a value of 26.40%, SO is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
SO's Operating Margin has been stable in the last couple of years.
SO has a better Gross Margin (89.46%) than 82.61% of its industry peers.
SO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.4% | ||
| PM (TTM) | 16.54% | ||
| GM | 89.46% |
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.
Compared to 1 year ago, SO has about the same amount of shares outstanding.
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.
The Altman-Z score of SO (0.98) is comparable to the rest of the industry.
The Debt to FCF ratio of SO is 653.53, which is on the high side as it means it would take SO, 653.53 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 653.53, SO is doing good in the industry, outperforming 60.87% of the companies in the same industry.
A Debt/Equity ratio of 1.88 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 1.88, SO is doing worse than 82.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 653.53 | ||
| Altman-Z | 0.98 |
ROIC/WACC0.68
WACC6.86%
2.3 Liquidity
SO has a Current Ratio of 0.86. This is a bad value and indicates that SO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of SO (0.86) is comparable to the rest of the industry.
A Quick Ratio of 0.64 indicates that SO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.64, SO is doing worse than 65.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.79% over the past year.
Measured over the past 5 years, SO shows a small growth in Earnings Per Share. The EPS has been growing by 5.48% on average per year.
The Revenue has grown by 9.58% in the past year. This is quite good.
SO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.53% yearly.
EPS 1Y (TTM)9.79%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%19.42%
Revenue 1Y (TTM)9.58%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%16.99%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.33% yearly.
Based on estimates for the next years, SO will show a small growth in Revenue. The Revenue will grow by 4.75% on average per year.
EPS Next Y8.47%
EPS Next 2Y7.57%
EPS Next 3Y7.44%
EPS Next 5Y7.33%
Revenue Next Year4.26%
Revenue Next 2Y4.17%
Revenue Next 3Y3.99%
Revenue Next 5Y4.75%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.92 indicates a rather expensive valuation of SO.
71.74% 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 26.19, SO is valued a bit cheaper.
With a Price/Forward Earnings ratio of 18.97, SO is valued on the expensive side.
Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than 76.09% 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 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 18.97 |
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 65.22% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SO indicates a somewhat cheap valuation: SO is cheaper than 63.04% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 933.05 | ||
| EV/EBITDA | 12.79 |
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)2.47
PEG (5Y)3.82
EPS Next 2Y7.57%
EPS Next 3Y7.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.30%, SO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.47, SO has a dividend in line with its industry peers.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
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 64.20% 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.
DP64.2%
EPS Next 2Y7.57%
EPS Next 3Y7.44%
NYSE:SO (5/30/2025, 1:44:05 PM)
89.14
+0.39 (+0.44%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners70.79%
Inst Owner Change1.44%
Ins Owners0.09%
Ins Owner Change5.11%
Market Cap97.97B
Analysts72.86
Price Target96.48 (8.23%)
Short Float %1.9%
Short Ratio4.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP64.2%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.2%
Min EPS beat(2)-4.33%
Max EPS beat(2)-0.07%
EPS beat(4)2
Avg EPS beat(4)3.82%
Min EPS beat(4)-4.33%
Max EPS beat(4)16.06%
EPS beat(8)6
Avg EPS beat(8)4.48%
EPS beat(12)9
Avg EPS beat(12)5.63%
EPS beat(16)11
Avg EPS beat(16)4.5%
Revenue beat(2)2
Avg Revenue beat(2)4.99%
Min Revenue beat(2)4.69%
Max Revenue beat(2)5.3%
Revenue beat(4)3
Avg Revenue beat(4)2.44%
Min Revenue beat(4)-3.09%
Max Revenue beat(4)5.3%
Revenue beat(8)3
Avg Revenue beat(8)-6.24%
Revenue beat(12)7
Avg Revenue beat(12)2.05%
Revenue beat(16)10
Avg Revenue beat(16)2.99%
PT rev (1m)1.55%
PT rev (3m)3.56%
EPS NQ rev (1m)-10.8%
EPS NQ rev (3m)-12.35%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-0.73%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.7%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 18.97 | ||
| P/S | 3.52 | ||
| P/FCF | 933.05 | ||
| P/OCF | 10.07 | ||
| P/B | 2.9 | ||
| P/tB | 3.46 | ||
| EV/EBITDA | 12.79 |
EPS(TTM)4.26
EY4.78%
EPS(NY)4.7
Fwd EY5.27%
FCF(TTM)0.1
FCFY0.11%
OCF(TTM)8.85
OCFY9.93%
SpS25.34
BVpS30.79
TBVpS25.8
PEG (NY)2.47
PEG (5Y)3.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 13.61% | ||
| ROCE | 5.47% | ||
| ROIC | 4.64% | ||
| ROICexc | 4.72% | ||
| ROICexgc | 4.92% | ||
| OM | 26.4% | ||
| PM (TTM) | 16.54% | ||
| GM | 89.46% | ||
| FCFM | 0.38% |
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-Score6
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 653.53 | ||
| Debt/EBITDA | 4.97 | ||
| Cap/Depr | 177.66% | ||
| Cap/Sales | 34.55% | ||
| Interest Coverage | 2.85 | ||
| Cash Conversion | 76.17% | ||
| Profit Quality | 2.28% | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 0.98 |
F-Score6
WACC6.86%
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)9.79%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%19.42%
EPS Next Y8.47%
EPS Next 2Y7.57%
EPS Next 3Y7.44%
EPS Next 5Y7.33%
Revenue 1Y (TTM)9.58%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%16.99%
Revenue Next Year4.26%
Revenue Next 2Y4.17%
Revenue Next 3Y3.99%
Revenue Next 5Y4.75%
EBIT growth 1Y17.81%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year83.12%
EBIT Next 3Y27.71%
EBIT Next 5Y21.45%
FCF growth 1Y103.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y75.14%
OCF growth 3Y16.63%
OCF growth 5Y11.11%