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SOUTHERN CO/THE (SO) Stock Fundamental Analysis

NYSE:SO - New York Stock Exchange, Inc. - US8425871071 - Common Stock - Currency: USD

95  -0.13 (-0.14%)

After market: 95.32 +0.32 (+0.34%)

Fundamental Rating

4

Overall SO gets a fundamental rating of 4 out of 10. We evaluated SO against 47 industry peers in the Electric Utilities industry. While SO is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, SO is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

6

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.
SO Yearly Net Income VS EBIT VS OCF VS FCFSO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B 6B 8B

1.2 Ratios

The Return On Assets of SO (3.11%) is comparable to the rest of the industry.
The Return On Equity of SO (13.61%) is better than 74.47% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.64%, SO is in line with its industry, outperforming 59.57% 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 38.54%.
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 RankSector 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%
SO Yearly ROA, ROE, ROICSO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15

1.3 Margins

Looking at the Profit Margin, with a value of 16.54%, SO is in the better half of the industry, outperforming 70.21% of the companies in the same industry.
In the last couple of years the Profit Margin of SO has declined.
SO has a better Operating Margin (26.40%) than 74.47% of its industry peers.
In the last couple of years the Operating Margin of SO has remained more or less at the same level.
With an excellent Gross Margin value of 89.46%, SO belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
In the last couple of years the Gross Margin of SO has remained more or less at the same level.
Industry RankSector 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%
SO Yearly Profit, Operating, Gross MarginsSO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

1

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.
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.
SO Yearly Shares OutstandingSO Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B
SO Yearly Total Debt VS Total AssetsSO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50B 100B

2.2 Solvency

SO has an Altman-Z score of 1.02. This is a bad value and indicates that SO is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.02, SO is in line with its industry, outperforming 57.45% of the companies in the same industry.
SO has a debt to FCF ratio of 653.53. This is a negative value and a sign of low solvency as SO would need 653.53 years to pay back of all of its debts.
SO's Debt to FCF ratio of 653.53 is in line compared 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 worse Debt to Equity ratio (1.88) than 85.11% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.88
Debt/FCF 653.53
Altman-Z 1.02
ROIC/WACC0.67
WACC6.91%
SO Yearly LT Debt VS Equity VS FCFSO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20B 40B

2.3 Liquidity

A Current Ratio of 0.86 indicates that SO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.86, SO is in line with its industry, outperforming 42.55% of the companies in the same 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 63.83% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.86
Quick Ratio 0.64
SO Yearly Current Assets VS Current LiabilitesSO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

5

3. Growth

3.1 Past

SO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.79%, which is quite good.
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 9.58% in the last year.
The Revenue has been growing slightly by 4.53% on average over the past years.
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

The Earnings Per Share is expected to grow by 7.26% on average over the next years.
The Revenue is expected to grow by 4.87% on average over the next years.
EPS Next Y8.45%
EPS Next 2Y7.61%
EPS Next 3Y7.43%
EPS Next 5Y7.26%
Revenue Next Year5.55%
Revenue Next 2Y5.01%
Revenue Next 3Y4.73%
Revenue Next 5Y4.87%

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 stable.
SO Yearly Revenue VS EstimatesSO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 10B 20B 30B
SO Yearly EPS VS EstimatesSO Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6

2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 22.30, the valuation of SO can be described as rather expensive.
Based on the Price/Earnings ratio, SO is valued a bit more expensive than 76.60% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.35. SO is around the same levels.
The Price/Forward Earnings ratio is 20.21, 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 78.72% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SO to the average of the S&P500 Index (37.54), we can say SO is valued slightly cheaper.
Industry RankSector Rank
PE 22.3
Fwd PE 20.21
SO Price Earnings VS Forward Price EarningsSO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

70.21% of the companies in the same industry are cheaper than SO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SO indicates a somewhat cheap valuation: SO is cheaper than 61.70% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 994.39
EV/EBITDA 13.33
SO Per share dataSO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of SO may justify a higher PE ratio.
PEG (NY)2.64
PEG (5Y)4.07
EPS Next 2Y7.61%
EPS Next 3Y7.43%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.17%, SO has a reasonable but not impressive dividend return.
SO's Dividend Yield is comparable with the industry average which is at 3.54.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.36.
Industry RankSector Rank
Dividend Yield 3.17%

5.2 History

The dividend of SO has a limited annual growth rate of 1.87%.
SO has paid a dividend for at least 10 years, which is 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
SO Yearly Dividends per shareSO Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2 2.5

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 2Y7.61%
EPS Next 3Y7.43%
SO Yearly Income VS Free CF VS DividendSO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B
SO Dividend Payout.SO Dividend Payout, showing the Payout Ratio.SO Dividend Payout.PayoutRetained Earnings

SOUTHERN CO/THE

NYSE:SO (7/24/2025, 8:04:24 PM)

After market: 95.32 +0.32 (+0.34%)

95

-0.13 (-0.14%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)05-01 2025-05-01/bmo
Earnings (Next)07-31 2025-07-31/amc
Inst Owners71.1%
Inst Owner Change-0.22%
Ins Owners0.1%
Ins Owner Change5.37%
Market Cap104.41B
Analysts74.48
Price Target96.18 (1.24%)
Short Float %2.75%
Short Ratio5.54
Dividend
Industry RankSector Rank
Dividend Yield 3.17%
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP64.2%
Div Incr Years23
Div Non Decr Years34
Ex-Date05-19 2025-05-19 (0.74)
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)0.58%
PT rev (3m)1.24%
EPS NQ rev (1m)-2.63%
EPS NQ rev (3m)-13.68%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.26%
Revenue NQ rev (1m)-1.22%
Revenue NQ rev (3m)-1.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.48%
Valuation
Industry RankSector Rank
PE 22.3
Fwd PE 20.21
P/S 3.75
P/FCF 994.39
P/OCF 10.73
P/B 3.09
P/tB 3.68
EV/EBITDA 13.33
EPS(TTM)4.26
EY4.48%
EPS(NY)4.7
Fwd EY4.95%
FCF(TTM)0.1
FCFY0.1%
OCF(TTM)8.85
OCFY9.32%
SpS25.34
BVpS30.79
TBVpS25.8
PEG (NY)2.64
PEG (5Y)4.07
Profitability
Industry RankSector 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 RankSector 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 1.02
F-Score6
WACC6.91%
ROIC/WACC0.67
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 Y8.45%
EPS Next 2Y7.61%
EPS Next 3Y7.43%
EPS Next 5Y7.26%
Revenue 1Y (TTM)9.58%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%16.99%
Revenue Next Year5.55%
Revenue Next 2Y5.01%
Revenue Next 3Y4.73%
Revenue Next 5Y4.87%
EBIT growth 1Y17.81%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year83.12%
EBIT Next 3Y27.71%
EBIT Next 5Y18.82%
FCF growth 1Y103.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y75.14%
OCF growth 3Y16.63%
OCF growth 5Y11.11%