SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - NYSE:SO - US8425871071 - Common Stock
95.88 USD
-0.27 (-0.28%)
95.76 USD
-0.12 (-0.13%)
Taking everything into account, SO scores 4 out of 10 in our fundamental rating. SO was compared to 47 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.
In the past year SO had a positive cash flow from operations.
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 (2.88%) which is in line with its industry peers.
SO has a Return On Equity of 12.59%. This is in the better half of the industry: SO outperforms 70.21% of its industry peers.
With a decent Return On Invested Capital value of 4.53%, SO is doing good in the industry, outperforming 65.96% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SO is in line with the industry average of 4.90%.
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 has a Operating Margin of 25.39%. This is in the better half of the industry: SO outperforms 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.
SO has a better Gross Margin (89.14%) than 82.98% of its industry peers.
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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SO 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.
Compared to 1 year ago, SO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.01, we must say that SO is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.01, SO perfoms like the industry average, outperforming 59.57% of the companies in the same industry.
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 89.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.01 |
ROIC/WACC0.68
WACC6.69%
2.3 Liquidity
SO has a Current 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.
The Current ratio of SO (0.74) is worse than 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.
Looking at the Quick ratio, with a value of 0.53, SO is doing worse than 63.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The earnings per share for SO have decreased by -2.63% in the last year.
SO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
Looking at the last year, SO shows a quite strong growth in Revenue. The Revenue has grown by 8.53% in the last year.
Measured over the past years, SO shows a small growth in Revenue. The Revenue has been growing by 4.53% on average per year.
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
The Earnings Per Share is expected to grow by 6.85% on average over the next years.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.64% yearly.
EPS Next Y8.3%
EPS Next 2Y7.79%
EPS Next 3Y7.56%
EPS Next 5Y6.85%
Revenue Next Year7.35%
Revenue Next 2Y6.08%
Revenue Next 3Y5.64%
Revenue Next 5Y4.64%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.50, the valuation of SO can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SO indicates a slightly more expensive valuation: SO is more expensive than 76.60% of the companies listed in the same industry.
SO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.89.
With a Price/Forward Earnings ratio of 20.33, SO is valued on the expensive side.
74.47% of the companies in the same industry are cheaper than SO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.99. SO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.5 | ||
| Fwd PE | 20.33 |
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 70.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.53 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.83
PEG (5Y)4.29
EPS Next 2Y7.79%
EPS Next 3Y7.56%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.08%.
SO's Dividend Yield is comparable with the industry average which is at 3.23.
SO's Dividend Yield is a higher than the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.08% |
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 their dividend for at least 10 years, which is a reliable track record.
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.
SO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP69.13%
EPS Next 2Y7.79%
EPS Next 3Y7.56%
95.88
-0.27 (-0.28%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners71.62%
Inst Owner Change0%
Ins Owners0.09%
Ins Owner Change-1.07%
Market Cap105.47B
Revenue(TTM)28.36B
Net Income(TTM)4.28B
Analysts75.71
Price Target98.44 (2.67%)
Short Float %3.46%
Short Ratio8.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.08% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP69.13%
Div Incr Years23
Div Non Decr Years34
Ex-Date
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)-0.03%
PT rev (3m)2.35%
EPS NQ rev (1m)0.75%
EPS NQ rev (3m)0.68%
EPS NY rev (1m)0.06%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)0.99%
Revenue NQ rev (3m)4%
Revenue NY rev (1m)0.48%
Revenue NY rev (3m)1.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.5 | ||
| Fwd PE | 20.33 | ||
| P/S | 3.72 | ||
| P/FCF | N/A | ||
| P/OCF | 11.44 | ||
| P/B | 3.1 | ||
| P/tB | 3.7 | ||
| EV/EBITDA | 13.53 |
EPS(TTM)4.08
EY4.26%
EPS(NY)4.72
Fwd EY4.92%
FCF(TTM)-0.98
FCFYN/A
OCF(TTM)8.38
OCFY8.74%
SpS25.78
BVpS30.92
TBVpS25.94
PEG (NY)2.83
PEG (5Y)4.29
Graham Number53.28
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%
ROICexgc growth 3Y6.47%
ROICexgc 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 | 1.01 |
F-Score4
WACC6.69%
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 Y8.3%
EPS Next 2Y7.79%
EPS Next 3Y7.56%
EPS Next 5Y6.85%
Revenue 1Y (TTM)8.53%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.89%
Revenue Next Year7.35%
Revenue Next 2Y6.08%
Revenue Next 3Y5.64%
Revenue Next 5Y4.64%
EBIT growth 1Y4.8%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year84.89%
EBIT Next 3Y28.4%
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 FAQ
What is the fundamental rating for SO stock?
ChartMill assigns a fundamental rating of 4 / 10 to SO.
Can you provide the valuation status for SOUTHERN CO/THE?
ChartMill assigns a valuation rating of 1 / 10 to SOUTHERN CO/THE (SO). This can be considered as Overvalued.
How profitable is SOUTHERN CO/THE (SO) stock?
SOUTHERN CO/THE (SO) has a profitability rating of 7 / 10.
What is the valuation of SOUTHERN CO/THE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for SOUTHERN CO/THE (SO) is 23.5 and the Price/Book (PB) ratio is 3.1.
What is the financial health of SOUTHERN CO/THE (SO) stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.