NYSE:SO

Stock Analysis Report

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Executive Summary

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity.


Snowflake Analysis

6 star dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has Southern's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.7%

SO

0.02%

US Electric Utilities

2.5%

US Market


1 Year Return

-5.2%

SO

-2.5%

US Electric Utilities

15.9%

US Market

Return vs Industry: SO underperformed the US Electric Utilities industry which returned -2.5% over the past year.

Return vs Market: SO underperformed the US Market which returned 15.9% over the past year.


Shareholder returns

SOIndustryMarket
7 Day-1.7%0.02%2.5%
30 Day3.5%4.1%5.8%
90 Day0.4%6.9%18.2%
1 Year-1.2%-5.2%0.6%-2.5%18.4%15.9%
3 Year28.3%11.4%3.2%-5.1%39.9%30.9%
5 Year47.5%16.9%38.3%18.0%72.9%54.2%

Price Volatility Vs. Market

How volatile is Southern's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Southern undervalued compared to its fair value and its price relative to the market?

17.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SO ($54.44) is trading above our estimate of fair value ($44.61)

Significantly Below Fair Value: SO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SO is good value based on its PE Ratio (17.7x) compared to the US Electric Utilities industry average (19.8x).

PE vs Market: SO is good value based on its PE Ratio (17.7x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: SO is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: SO is overvalued based on its PB Ratio (2.1x) compared to the US Electric Utilities industry average (1.9x).


Next Steps

Future Growth

How is Southern forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SO's forecast earnings growth (7.6% per year) is above the savings rate (2.2%).

Earnings vs Market: SO's earnings (7.6% per year) are forecast to grow slower than the US market (22.4% per year).

High Growth Earnings: SO's earnings are forecast to grow, but not significantly.

Revenue vs Market: SO's revenue (4% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: SO's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SO's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has Southern performed over the past 5 years?

15.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SO has high quality earnings.

Growing Profit Margin: SO's current net profit margins (15.8%) are lower than last year (20.1%).


Past Earnings Growth Analysis

Earnings Trend: SO's earnings have grown by 15.4% per year over the past 5 years.

Accelerating Growth: SO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SO had negative earnings growth (-26.9%) over the past year, making it difficult to compare to the Electric Utilities industry average (4.8%).


Return on Equity

High ROE: SO's Return on Equity (9.9%) is considered low.


Next Steps

Financial Health

How is Southern's financial position?


Financial Position Analysis

Short Term Liabilities: SO's short term assets ($9.1B) do not cover its short term liabilities ($9.3B).

Long Term Liabilities: SO's short term assets ($9.1B) do not cover its long term liabilities ($78.1B).


Debt to Equity History and Analysis

Debt Level: SO's debt to equity ratio (148.6%) is considered high.

Reducing Debt: SO's debt to equity ratio has increased from 127.7% to 148.6% over the past 5 years.

Debt Coverage: SO's debt is not well covered by operating cash flow (12.8%).

Interest Coverage: SO's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet


Next Steps

Dividend

What is Southern current dividend yield, its reliability and sustainability?

4.70%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SO's dividend (4.7%) is higher than the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: SO's dividend (4.7%) is in the top 25% of dividend payers in the US market (4.54%)


Stability and Growth of Payments

Stable Dividend: SO's dividends per share have been stable in the past 10 years.

Growing Dividend: SO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (81.4%), SO's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SO's dividends in 3 years are forecast to be covered by earnings (75.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.4yrs

Average management tenure


CEO

Tom Fanning (63 yo)

9.67yrs

Tenure

US$27,865,185

Compensation

Mr. Thomas A. Fanning, also known as Tom, has been the Chairman and Chief Executive Officer of The Southern Company since December 1, 2010 and its President of Southern Company since August 1, 2010. He ser ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD27.87M) is above average for companies of similar size in the US market ($USD11.35M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Fanning
Chairman9.67yrsUS$27.87m0.060%
$ 34.2m
Andrew Evans
Executive VP & CFO2.17yrsUS$5.48m0.014%
$ 7.8m
William Bowers
Chairman6.25yrsUS$8.86m0.017%
$ 9.5m
Kimberly Greene
Chairman2.17yrsUS$5.09m0.0076%
$ 4.3m
Mark Crosswhite
Chairmanno dataUS$8.23m0.011%
$ 6.0m
Ann Daiss
Chief Accounting Officer & Comptroller7.42yrsno data0.0019%
$ 1.1m
Martin Davis
Chief Information Officer & Executive VP5.08yrsno datano data
Scott Gammill
Director of Investor Relationsno datano datano data
James Kerr
Executive VP6.42yrsno data0.0086%
$ 4.9m
Stacy Kilcoyne
Vice President of Human Resources9.83yrsno datano data
Christopher Womack
Executive VP & President of External Affairs11.58yrsno data0.0019%
$ 1.1m
Marc Rice
Head of Mediano datano datano data

7.4yrs

Average Tenure

56yo

Average Age

Experienced Management: SO's management team is seasoned and experienced (7.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Fanning
Chairman9.67yrsUS$27.87m0.060%
$ 34.2m
William Bowers
Chairman6.25yrsUS$8.86m0.017%
$ 9.5m
Kimberly Greene
Chairman2.17yrsUS$5.09m0.0076%
$ 4.3m
Mark Crosswhite
Chairmanno dataUS$8.23m0.011%
$ 6.0m
Stephen Kuczynski
Chairman9.08yrsUS$6.46m0.0073%
$ 4.2m
Anthony Wilson
Chairman4yrsno data0.0048%
$ 2.7m
John Johns
Independent Director5.5yrsUS$270.00k0.000050%
$ 28.5k
Jon Boscia
Independent Director12.67yrsUS$261.67k0.015%
$ 8.6m
Donald James
Independent Director21.58yrsUS$250.00kno data
William Smith
Independent Director14.5yrsUS$270.00k0.00089%
$ 507.7k
David Grain
Independent Director7.67yrsUS$270.00k0.0010%
$ 581.8k
Steven Specker
Lead Independent Director2.25yrsUS$290.00kno data

7.7yrs

Average Tenure

63.5yo

Average Age

Experienced Board: SO's board of directors are considered experienced (7.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Southern Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Southern Company
  • Ticker: SO
  • Exchange: NYSE
  • Founded: 1945
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: US$57.042b
  • Shares outstanding: 1.06b
  • Website: https://www.southerncompany.com

Number of Employees


Location

  • The Southern Company
  • 30 Ivan Allen Jr. Boulevard, N.W.
  • Atlanta
  • Georgia
  • 30308
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SONYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
SOTDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0L8ALSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
SOTETLX (Eurotlx)YesCommon StockITEURJan 1968
SOUTWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
T1SO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It operates in four segments: Gas Distribution Operations, Gas Pipeline Investments ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/05 00:16
End of Day Share Price2020/08/04 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.