Southern Co (SO): Today's Featured Utilities Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Southern (SO) pushed the Utilities sector lower today making it today's featured Utilities laggard. The sector as a whole closed the day down 2.3%. By the end of trading, Southern fell $1.32 (-3%) to $42.82 on heavy volume. Throughout the day, 6.8 million shares of Southern exchanged hands as compared to its average daily volume of 3.8 million shares. The stock ranged in price between $42.70-$44.08 after having opened the day at $44 as compared to the previous trading day's close of $44.14. Other companies within the Utilities sector that declined today were: Ocean Power Technologies (OPTT), down 8%, Ormat Technologies (ORA), down 7.3%, Clean Energy Fuels Corporation (CLNE), down 6.4%, and Delta Natural Gas Company (DGAS), down 6%.

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The Southern Company operates as an electric utility company. It is involved in the generation, transmission, and distribution of electricity through coal, nuclear, oil and gas, and hydro resources. Southern has a market cap of $39.03 billion and is part of the utilities industry. The company has a P/E ratio of 17.4, below the S&P 500 P/E ratio of 17.7. Shares are down 4.6% year to date as of the close of trading on Tuesday. Currently there is one analyst that rates Southern a buy, two analysts rate it a sell, and 13 rate it a hold.

TheStreet Ratings rates Southern as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins, growth in earnings per share, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the utilities sector could consider Utilities Select Sector SPDR (XLU) while those bearish on the utilities sector could consider ProShares UltraShort Utilities (SDP).

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For more information on Southern Co click any of the following:

• Southern Co Stock Price

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• Southern Co Earnings

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• Southern Co Balance Sheet

• Southern Co Cash Flow

• Southern Co Income Statement