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%)
Overall SO gets a fundamental rating of 4 out of 10. We evaluated SO 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.
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.
With a decent Return On Equity value of 12.59%, SO is doing good in the industry, outperforming 70.21% of the companies in the same industry.
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 last Return On Invested Capital (4.53%) for SO is above the 3 year average (4.14%), which is a sign of increasing profitability.
| 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
SO has a better Profit Margin (15.10%) than 61.70% of its industry peers.
In the last couple of years the Profit Margin of SO has declined.
With a decent Operating Margin value of 25.39%, SO is doing good in the industry, outperforming 74.47% of the companies in the same industry.
In the last couple of years the Operating Margin of SO has remained more or less at the same level.
The Gross Margin of SO (89.14%) is better 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SO is destroying value.
SO has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for SO remains at a similar level 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 1.01, we must say that SO is in the distress zone and has some risk of bankruptcy.
SO's Altman-Z score of 1.01 is in line compared to the rest of the industry. SO outperforms 59.57% of its industry peers.
A Debt/Equity ratio of 1.88 is on the high side and indicates that SO has dependencies on debt 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 | 1.01 |
ROIC/WACC0.68
WACC6.69%
2.3 Liquidity
A Current Ratio of 0.74 indicates that SO may have some problems paying its short term obligations.
With a Current ratio value of 0.74, SO is not doing good in the industry: 63.83% of the companies in the same industry are doing better.
A Quick Ratio of 0.53 indicates that SO may have some problems paying its short term obligations.
SO has a Quick ratio of 0.53. This is in the lower half of the industry: SO underperforms 63.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.53 |
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.
The Revenue has grown by 8.53% in the past year. This is quite good.
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
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.85% yearly.
The Revenue is expected to grow by 4.64% on average over the next years.
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
With a Price/Earnings ratio of 23.50, SO is valued on the expensive side.
76.60% of the companies in the same industry are cheaper than SO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of SO to the average of the S&P500 Index (26.89), we can say SO is valued inline with the index average.
The Price/Forward Earnings ratio is 20.33, which indicates a rather expensive current valuation of SO.
Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than the industry average as 74.47% of the companies are valued more cheaply.
SO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.5 | ||
| Fwd PE | 20.33 |
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.
| 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 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)2.83
PEG (5Y)4.29
EPS Next 2Y7.79%
EPS Next 3Y7.56%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.08%, SO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.23, SO has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.31, SO pays a bit more dividend than the S&P500 average.
| 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
SO pays out 69.13% of its income as dividend. 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.