SOUTHERN CO's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. SOUTHERN CO has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.
During the same period, stockholders' equity ("net worth") has increased by 5.41% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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|Income Statement||Q3 FY14||Q3 FY13|
|Net Sales ($mil)||5339.0||5017.0|
|Net Income ($mil)||735.0||869.0|
|Balance Sheet||Q3 FY14||Q3 FY13|
|Cash & Equiv. ($mil)||1414.0||682.0|
|Total Assets ($mil)||67654.0||64697.0|
|Total Debt ($mil)||24683.0||23260.0|
|Profitability||Q3 FY14||Q3 FY13|
|Gross Profit Margin||41.39||42.28|
|Return on Assets||3.19||2.59|
|Return on Equity||9.97||8.1|
|Debt||Q3 FY14||Q3 FY13|
|Share Data||Q3 FY14||Q3 FY13|
|Shares outstanding (mil)||899.81||881.74|
|Div / share||0.53||0.51|
|Book value / share||23.32||22.58|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||5466408.0||4430946.0|
BUY. The current P/E ratio indicates a premium compared to an average of 17.75 for the Electric Utilities industry and a value on par with the S&P 500 average of 19.91. Conducting a second comparison, its price-to-book ratio of 2.02 indicates a discount versus the S&P 500 average of 2.75 and a premium versus the industry average of 1.59. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, SOUTHERN CO proves to trade at a premium to investment alternatives within the industry.
|SO 20.13||Peers 17.75||SO 6.65||Peers 6.62|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.
SO is trading at a premium to its peers.
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
SO is trading at a valuation on par to its peers.
|SO 16.41||Peers 16.09||SO 0.40||Peers 1.54|
Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.
SO is trading at a valuation on par with its peers.
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
SO trades at a significant discount to its peers.
|SO 2.02||Peers 1.59||SO 27.86||Peers 44.62|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
SO is trading at a significant premium to its peers.
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
However, SO is expected to significantly trail its peers on the basis of its earnings growth rate.
|SO 2.31||Peers 1.84||SO 8.97||Peers 4.72|
Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
SO is trading at a significant premium to its industry.
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.
SO has a sales growth rate that significantly exceeds its peers.
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