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
Interest Expense424.0293.0
Interest Coverage3.374.41

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


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.

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.

1 2 3 4 5
premium   discount
  Price to
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.

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.

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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