SO The Southern Company - Fundamental Analysis
NEUTRAL
SO Stock | Fundamental Analysis & Investment Insights
NYSE
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Utilities
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Utilities - Regulated Electric
Current Price
$90.69
Analyst Target
$99.67
+9.9% Upside
52W High
$100.84
52W Low
$80.46
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
78%
Analysis Accuracy
The Southern Company (SO) trades at a premium valuation relative to peers with a P/E of 22.56 versus the sector average of 26.63, yet exhibits stronger earnings growth (10.8% YoY) and consistent quarterly beats, including a 73.9% Q/Q EPS surge. Profitability metrics are solid—ROE of 11.43% and operating margin of 36.56%—but tempered by elevated leverage (Debt/Equity: 1.93) and weakening insider sentiment, with $3.16M in officer sales over the past six months. The 3.26% dividend yield offers income appeal, though the 72.6% payout ratio leaves limited room for aggressive hikes. Price momentum has softened recently (-9.1% over 1M), underperforming peer NEE, which gained 13.6% over 6M, despite SO’s strong 5Y return of +69.5%.
Key Strengths
Consistent earnings outperformance: 22 of the last 25 quarters beat estimates, with an average surprise of 4.57% and recent acceleration in EPS growth (15.1% YoY, 73.9% Q/Q)
Superior profitability: Operating margin of 36.56% and gross margin of 49.02% significantly exceed sector averages, reflecting pricing power and cost discipline
Attractive dividend yield of 3.26%, above the sector median and providing reliable income in a low-growth environment
Revenue growth of 7.5% YoY outpaces peer average of 5.30%, driven by regulated rate base expansion and clean energy investments
ROE of 11.43% exceeds sector average of 8.24%, indicating efficient use of equity capital
Key Risks
Elevated leverage with Debt/Equity of 1.93, above peer average of 1.44, increasing interest rate and refinancing risk
Deteriorating liquidity: Current ratio of 0.76 and quick ratio of 0.43 suggest potential near-term cash flow pressure
Insider selling trend: $3.16M in net officer sales over the last 6 months signals lack of confidence among executives
Rich valuation relative to growth: Forward P/E of 20.99 implies limited margin of safety despite solid fundamentals
Recent underperformance: -9.1% over 1 month contrasts with peer NEE’s +13.6% 6M return, indicating weakening relative momentum
AI Fair Value Estimate
Based on comprehensive analysis
$99.67
+9.9% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare SO against industry averages and similar companies
Insider Trading & Analyst Ratings
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