SOUTHERN CO/THE (SO)
US8425871071 - Common Stock
Taking everything into account, SO scores 4 out of 10 in our fundamental rating. SO was compared to 45 industry peers in the Electric Utilities industry. SO scores excellent on profitability, but there are concerns on its financial health. SO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
SO had positive earnings in the past year.
SO had a positive operating cash flow in the past year.
SO had positive earnings in each of the past 5 years.
Each year in the past 5 years SO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.85%, SO is in line with its industry, outperforming 60.00% of the companies in the same industry.
The Return On Equity of SO (12.65%) is better than 75.56% of its industry peers.
The Return On Invested Capital of SO (3.78%) is better than 66.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SO is in line with the industry average of 4.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.85% | ||
| ROE | 12.65% | ||
| ROIC | 3.78% |
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's Profit Margin of 15.75% is fine compared to the rest of the industry. SO outperforms 77.78% of its industry peers.
In the last couple of years the Profit Margin of SO has grown nicely.
SO has a better Operating Margin (22.63%) than 73.33% 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's Gross Margin of 87.78% is amongst the best of the industry. SO outperforms 86.67% 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 | 22.63% | ||
| PM (TTM) | 15.75% | ||
| GM | 87.78% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SO 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.
SO has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.86, we must say that SO is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.86, SO is in the better half of the industry, outperforming 64.44% of the companies in the same industry.
A Debt/Equity ratio of 1.89 is on the high side and indicates that SO has dependencies on debt financing.
The Debt to Equity ratio of SO (1.89) is worse than 71.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.89 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.86 |
ROIC/WACC0.57
WACC6.63%
2.3 Liquidity
SO has a Current Ratio of 0.77. 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 Current ratio of 0.77 is on the low side compared to the rest of the industry. SO is outperformed by 62.22% of its industry peers.
A Quick Ratio of 0.53 indicates that SO may have some problems paying 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 71.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.83% 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.
SO shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -13.75%.
SO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.45% yearly.
EPS 1Y (TTM)0.83%
EPS 3Y3.85%
EPS 5Y3.46%
EPS growth Q2Q146.15%
Revenue 1Y (TTM)-13.75%
Revenue growth 3Y7.42%
Revenue growth 5Y1.45%
Revenue growth Q2Q-14.22%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.59% yearly.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.92% yearly.
EPS Next Y13.57%
EPS Next 2Y10.57%
EPS Next 3Y9.1%
EPS Next 5Y7.59%
Revenue Next Year0.17%
Revenue Next 2Y1.55%
Revenue Next 3Y1.84%
Revenue Next 5Y3.92%
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
A Price/Earnings ratio of 20.12 indicates a rather expensive valuation of SO.
SO's Price/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.
SO is valuated rather cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.72, which indicates a rather expensive current valuation of SO.
SO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SO is more expensive than 75.56% 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 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.12 | ||
| Fwd PE | 17.72 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than the industry average as 75.56% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13 |
4.3 Compensation for Growth
SO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SO may justify a higher PE ratio.
PEG (NY)1.48
PEG (5Y)5.81
EPS Next 2Y10.57%
EPS Next 3Y9.1%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.97%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.36, SO has a dividend in line with its industry peers.
SO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.97% |
5.2 History
The dividend of SO has a limited annual growth rate of 2.61%.
SO has paid a dividend for at least 10 years, which is a reliable track record.
SO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.61%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
76.31% 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.
DP76.31%
EPS Next 2Y10.57%
EPS Next 3Y9.1%
SOUTHERN CO/THE
NYSE:SO (4/23/2024, 7:26:03 PM)
After market: 73.25 0 (0%)73.25
+0.27 (+0.37%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap80.18B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.97% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.12 | ||
| Fwd PE | 17.72 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.48
PEG (5Y)5.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.85% | ||
| ROE | 12.65% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 22.63% | ||
| PM (TTM) | 15.75% | ||
| GM | 87.78% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.89 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)0.83%
EPS 3Y3.85%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.57%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-13.75%
Revenue growth 3Y7.42%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y