SOUTHERN CO/THE (SO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SO - US8425871071 - Common Stock
87.2 USD
-0.37 (-0.42%)
87.31 USD
+0.11 (+0.13%)
We assign a fundamental rating of 4 out of 10 to SO. SO was compared to 47 industry peers in the Electric Utilities industry. SO has an excellent profitability rating, but there are concerns on its financial health. SO is valied quite expensively at the moment, while it does show a decent growth rate. Finally SO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SO was profitable.
SO had a positive operating cash flow in the past year.
SO had positive earnings in each of the past 5 years.
In the past 5 years SO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of SO (2.91%) is comparable to the rest of the industry.
The Return On Equity of SO (12.74%) is better than 68.09% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.62%, SO is in the better half of the industry, outperforming 63.83% 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 in line with the industry average of 5.04%.
The last Return On Invested Capital (4.62%) for SO is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 12.74% | ||
| ROIC | 4.62% |
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 Profit Margin of 15.42%. This is in the better half of the industry: SO outperforms 63.83% of its industry peers.
SO's Profit Margin has declined in the last couple of years.
SO's Operating Margin of 25.68% is fine compared to the rest of the industry. SO outperforms 72.34% of its industry peers.
SO's Operating Margin has been stable in the last couple of years.
The Gross Margin of SO (89.28%) is better than 80.85% 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 | 25.68% | ||
| PM (TTM) | 15.42% | ||
| GM | 89.28% |
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.
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 0.94, we must say that SO is in the distress zone and has some risk of bankruptcy.
SO has a Altman-Z score of 0.94. This is comparable to the rest of the industry: SO outperforms 57.45% of its industry peers.
A Debt/Equity ratio of 1.85 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 1.85, SO is doing worse than 85.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACC0.7
WACC6.64%
2.3 Liquidity
SO has a Current Ratio of 0.75. 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 (0.75) is worse than 65.96% of its industry peers.
A Quick Ratio of 0.56 indicates that SO may have some problems paying its short term obligations.
SO has a worse Quick ratio (0.56) than 70.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.75 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.19% over the past year.
SO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
The Revenue has grown by 9.40% 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)1.19%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%11.89%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
3.2 Future
SO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.18% yearly.
SO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.32% yearly.
EPS Next Y8.88%
EPS Next 2Y7.76%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue Next Year8.18%
Revenue Next 2Y6.59%
Revenue Next 3Y6.04%
Revenue Next 5Y6.32%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.52, SO is valued on the expensive side.
70.21% of the companies in the same industry are cheaper than SO, based on the Price/Earnings ratio.
SO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.51.
SO is valuated rather expensively with a Price/Forward Earnings ratio of 18.50.
Based on the Price/Forward Earnings ratio, SO is valued a bit more expensive than 61.70% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.13. SO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.52 | ||
| Fwd PE | 18.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SO is valued a bit more expensive than the industry average as 63.83% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.49 |
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)2.31
PEG (5Y)3.75
EPS Next 2Y7.76%
EPS Next 3Y7.68%
5. Dividend
5.1 Amount
SO has a Yearly Dividend Yield of 3.40%.
SO's Dividend Yield is a higher than the industry average which is at 3.02.
SO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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
67.01% 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.
DP67.01%
EPS Next 2Y7.76%
EPS Next 3Y7.68%
87.2
-0.37 (-0.42%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners74.14%
Inst Owner Change4.51%
Ins Owners0.09%
Ins Owner Change-1.53%
Market Cap96.02B
Revenue(TTM)28.91B
Net Income(TTM)4.46B
Analysts70.3
Price Target98.38 (12.82%)
Short Float %2.32%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
Yearly Dividend2.69
Dividend Growth(5Y)1.87%
DP67.01%
Div Incr Years23
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.4%
Min EPS beat(2)-0.3%
Max EPS beat(2)3.1%
EPS beat(4)1
Avg EPS beat(4)-0.4%
Min EPS beat(4)-4.33%
Max EPS beat(4)3.1%
EPS beat(8)5
Avg EPS beat(8)3.95%
EPS beat(12)9
Avg EPS beat(12)4.23%
EPS beat(16)11
Avg EPS beat(16)4.62%
Revenue beat(2)1
Avg Revenue beat(2)3.8%
Min Revenue beat(2)-0.17%
Max Revenue beat(2)7.77%
Revenue beat(4)3
Avg Revenue beat(4)4.4%
Min Revenue beat(4)-0.17%
Max Revenue beat(4)7.77%
Revenue beat(8)4
Avg Revenue beat(8)-1.23%
Revenue beat(12)6
Avg Revenue beat(12)-1.21%
Revenue beat(16)10
Avg Revenue beat(16)3.55%
PT rev (1m)-3.14%
PT rev (3m)-0.09%
EPS NQ rev (1m)-1.19%
EPS NQ rev (3m)-8.62%
EPS NY rev (1m)0.47%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)-1.91%
Revenue NQ rev (3m)-4.81%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.52 | ||
| Fwd PE | 18.5 | ||
| P/S | 3.32 | ||
| P/FCF | N/A | ||
| P/OCF | 10.24 | ||
| P/B | 2.74 | ||
| P/tB | 3.25 | ||
| EV/EBITDA | 12.49 |
EPS(TTM)4.25
EY4.87%
EPS(NY)4.71
Fwd EY5.41%
FCF(TTM)-1.66
FCFYN/A
OCF(TTM)8.52
OCFY9.77%
SpS26.26
BVpS31.79
TBVpS26.82
PEG (NY)2.31
PEG (5Y)3.75
Graham Number55.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 12.74% | ||
| ROCE | 5.44% | ||
| ROIC | 4.62% | ||
| ROICexc | 4.74% | ||
| ROICexgc | 4.94% | ||
| OM | 25.68% | ||
| PM (TTM) | 15.42% | ||
| GM | 89.28% | ||
| 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-Score5
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.91 | ||
| Cap/Depr | 193.96% | ||
| Cap/Sales | 38.74% | ||
| Interest Coverage | 2.75 | ||
| Cash Conversion | 71.04% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.75 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 0.94 |
F-Score5
WACC6.64%
ROIC/WACC0.7
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)1.19%
EPS 3Y5.99%
EPS 5Y5.48%
EPS Q2Q%11.89%
EPS Next Y8.88%
EPS Next 2Y7.76%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue 1Y (TTM)9.4%
Revenue growth 3Y4.96%
Revenue growth 5Y4.53%
Sales Q2Q%7.55%
Revenue Next Year8.18%
Revenue Next 2Y6.59%
Revenue Next 3Y6.04%
Revenue Next 5Y6.32%
EBIT growth 1Y6.57%
EBIT growth 3Y10.62%
EBIT growth 5Y5.63%
EBIT Next Year87.46%
EBIT Next 3Y30.06%
EBIT Next 5Y19.79%
FCF growth 1Y6.85%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y33.49%
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.
What is the valuation status of SOUTHERN CO/THE (SO) stock?
ChartMill assigns a valuation rating of 2 / 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.
Can you provide the financial health for SO stock?
The financial health rating of SOUTHERN CO/THE (SO) is 1 / 10.
Can you provide the dividend sustainability for SO stock?
The dividend rating of SOUTHERN CO/THE (SO) is 7 / 10 and the dividend payout ratio is 67.01%.