Southern Co (SO) AI Stock Analysis

• Market Cap: $99.64B
• Dividend Yield: 3.17%
• Average Volume (3M): 5.49M
• Price to Earnings (P/E): 22.7
• Beta (1Y): 0.17
• Revenue Growth: 5.83%
• EPS Growth: 10.23%
• Country: US
• Employees: 28,100
• Sector: Utilities
• Sector Strength: 79
• Industry: Regulated Utilities
• EPS (TTM): 3.99
• Shares Outstanding: 1,096,802,200
• 10 Day Avg. Volume: 6,092,148
• 30 Day Avg. Volume: 5,486,246
• PEG Ratio: 2.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.73
• Price to Cash Flow (P/CF): 11.50
• P/FCF Ratio: 11.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $90.36
• Price Target Upside: 0.52% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

Southern Co's strong financial performance is highlighted by consistent revenue growth and improved profitability, despite high leverage typical in the utilities sector. The technical indicators show positive momentum, although attention to potential overbought signals is advised. Valuation is slightly elevated with a P/E ratio above industry average, but the dividend yield offers income support. The earnings call underscores positive growth prospects and significant capital investment, adding to the overall positive outlook.

Positive Factors

Capital Investment

Southern Company increased its rate base growth target to 7% and extended its capital investment plan to $63bn.

Demand Growth

The company provided additional detail around data center demand growth, indicating a strong future load pipeline.

Negative Factors

Operating Expenses

Earnings performance was offset by higher operating and maintenance expense, higher depreciation and amortization expense, and higher interest expense.

Southern Co Business Overview & Revenue Model

Company Description

Southern Company (SO) is a leading energy company headquartered in Atlanta, Georgia. It operates primarily in the southeastern United States, providing electricity and natural gas to millions of customers. The company is involved in the generation, transmission, and distribution of electricity, as well as the sale and distribution of natural gas. Southern Co. owns a diverse mix of energy resources, including nuclear, coal, natural gas, and renewables, and is committed to delivering reliable and sustainable energy solutions.

How the Company Makes Money

Southern Company generates revenue primarily through the regulated sale of electricity and natural gas to residential, commercial, and industrial customers. The company's key revenue streams include electricity sales, which are driven by customer demand and regulated rates, and natural gas sales, which are influenced by market prices and consumption patterns. Southern Co. also earns income from its unregulated businesses, such as wholesale electricity sales and energy-related services. Significant partnerships, investments in renewable energy, and strategic acquisitions further contribute to the company's earnings by enhancing its capacity and market reach.

Southern Co Financial Statement Overview

Summary

Southern Co exhibits strong financial health with consistent revenue growth and improved profitability. While leverage is high, it is typical for the industry and is balanced by solid equity returns. Cash flow improvements highlight the company's ability to generate and manage cash effectively. However, the high debt levels pose a risk that needs monitoring.

Income Statement

Southern Co shows strong revenue growth with a 5.8% increase from 2023 to 2024. Gross profit margin improved significantly, indicating better cost management. The EBIT and EBITDA margins are solid, reflecting efficient operations. However, net profit margin is slightly impacted by high interest expenses typical in the utilities sector.

Balance Sheet

The debt-to-equity ratio is relatively high, suggesting significant leverage, which is common in the utilities industry. Return on equity is healthy at approximately 13.3%, indicating effective use of equity. Equity ratio shows a stable financial structure, albeit with a high reliance on debt.

Cash Flow

Operating cash flow has increased, demonstrating strong cash generation capability. The free cash flow has turned positive in 2024, a significant improvement from previous years. This suggests better cash management, though the high capital expenditure remains a concern.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
26.72B	25.25B	29.28B	23.11B	20.38B
	Gross Profit
20.55B	11.71B	10.82B	10.06B	9.90B
	EBIT
7.07B	5.83B	5.37B	3.70B	4.88B
	EBITDA
13.24B	11.74B	9.97B	8.31B	9.20B
	Net Income Common Stockholders
4.40B	3.98B	3.54B	2.41B	3.13B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07B	748.00M	1.92B	1.80B	1.06B
	Total Assets
145.18B	139.33B	134.89B	127.53B	122.94B
	Total Debt
61.56B	63.49B	59.13B	55.47B	51.04B
	Net Debt
61.56B	62.74B	57.22B	53.67B	49.98B
	Total Liabilities
108.51B	104.11B	100.36B	94.97B	90.41B
	Stockholders Equity
33.21B	31.44B	30.41B	28.16B	28.26B
Cash Flow		Free Cash Flow
833.00M	-1.54B	-1.62B	-1.07B	-745.00M
	Operating Cash Flow
9.79B	7.55B	6.30B	6.17B	6.70B
	Investing Cash Flow
-9.40B	-9.67B	-8.43B	-7.35B	-7.03B
	Financing Cash Flow
-208.00M	999.00M	2.34B	1.95B	-576.00M

Southern Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 89.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Positive. The current price of 89.89 is above the 20-day moving average (MA) of 86.75, above the 50-day MA of 84.01, and above the 200-day MA of 83.69, indicating a bullish trend. The MACD of 1.75 indicates Negative momentum. The RSI at 64.01 is Neutral, neither overbought nor oversold. The STOCH value of 88.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SO.

Southern Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DUK	77 Outperform	$90.39B	20.48	9.03%	3.50%	4.46%	54.09%
SO	77 Outperform	$99.64B	22.75	13.25%	3.17%	5.83%	10.23%
AEP	73 Outperform	$56.12B	18.85	73.81%	3.36%	2.76%	31.53%
D	72 Outperform	$48.46B	23.33	<0.01%	4.69%	-10.79%	18.04%
EXC	72 Outperform	$43.91B	17.81	9.14%	3.46%	5.98%	4.99%
PPL	68 Neutral	$25.63B	28.99	27.15%	2.89%	1.80%	19.78%
Sector *	65 Neutral	$12.05B	15.92	6.71%	4.32%	8.04%	3.76%

Southern Co Corporate Events

Southern Co Elects James Etheredge as New Director

On February 11, 2025, Southern Company announced the election of Mr. James O. Etheredge as a new director, effective April 1, 2025. Mr. Etheredge, who retired in August 2023 as the CEO of Accenture North America, will join Southern Company without any existing arrangements influencing his selection and will participate in their standard non-employee director compensation program.

Southern Co Appoints New COO for 2025

The Southern Company has announced Stanley W. Connally, Jr. as their new Executive Vice President and Chief Operating Officer starting January 2025. Connally, who has been with the company since 2012 in various executive roles, is stepping up from his current position as Executive VP for Operations. Details about his new compensation package are yet to be finalized.