Southern Co

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SO : NYSE : Utilities
$49.87 -0.2 | -0.4%
Today's Range: 49.68 - 50.1
Avg. Daily Volume: 4421900.0
09/19/17 - 4:00 PM ET

Financial Analysis


SOUTHERN CO's gross profit margin for the second quarter of its fiscal year 2017 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 0.31 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 5.32% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)5431.04459.0
EBITDA ($mil)2180.01861.9
EBIT ($mil)1427.01292.9
Net Income ($mil)-1370.0624.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)1433.09860.0
Total Assets ($mil)108684.090873.0
Total Debt ($mil)50190.039464.0
Equity ($mil)23952.022742.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin40.1441.76
EBITDA Margin40.1341.75
Operating Margin26.2829.0
Sales Turnover0.210.19
Return on Assets0.612.61
Return on Equity2.6210.22
Debt Q2 FY17 Q2 FY16
Current Ratio0.691.78
Debt/Capital0.680.63
Interest Expense424.0293.0
Interest Coverage3.374.41


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)999.47941.6
Div / share0.580.56
EPS-1.380.65
Book value / share23.9624.15
Institutional Own % n/a n/a
Avg Daily Volume4554650.05023275.0

Valuation


BUY. SOUTHERN CO's P/E ratio indicates a significant premium compared to an average of 27.92 for the Electric Utilities industry and a significant premium compared to the S&P 500 average of 24.88. Conducting a second comparison, its price-to-book ratio of 2.10 indicates a discount versus the S&P 500 average of 3.10 and a premium versus the industry average of 2.04. The current price-to-sales ratio is similar to the S&P 500 average, but it is below the industry average, indicating a discount. After reviewing these and other key valuation criteria, SOUTHERN CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SO 76.36 Peers 27.92   SO 9.27 Peers 8.86

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

SO is trading at a significant 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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SO 16.66 Peers 19.36   SO 4.87 Peers 2.26

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

SO is trading at a discount to its peers.

 

Premium. 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 premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SO 2.10 Peers 2.04   SO -73.92 Peers -4.09

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SO is trading at a valuation on par with 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SO 2.22 Peers 2.37   SO 30.00 Peers 14.17

Average. 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 valuation on par with its industry on this measurement.

 

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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