Southern Co

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SO : NYSE : Utilities
$49.06 | %
Today's Range: 48.82 - 49.2461
Avg. Daily Volume: 5057300.0
01/20/17 - 4:04 PM ET

Financial Analysis


SOUTHERN CO's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. SOUTHERN CO has very weak liquidity. Currently, the Quick Ratio is 0.50 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.

During the same period, stockholders' equity ("net worth") has increased by 14.66% 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 FY16 Q3 FY15
Net Sales ($mil)6264.05401.0
EBITDA ($mil)2740.62339.0
EBIT ($mil)2045.61811.0
Net Income ($mil)1140.0969.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)2669.01109.0
Total Assets ($mil)106362.075215.0
Total Debt ($mil)45474.027129.0
Equity ($mil)25274.022041.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin43.7543.31
EBITDA Margin43.7543.3
Operating Margin32.6633.53
Sales Turnover0.170.24
Return on Assets2.393.24
Return on Equity9.8710.79
Debt Q3 FY16 Q3 FY15
Current Ratio0.910.65
Debt/Capital0.640.55
Interest Expense374.0219.0
Interest Coverage5.478.27


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)980.0908.94
Div / share0.560.54
EPS1.161.05
Book value / share25.7924.25
Institutional Own % n/a n/a
Avg Daily Volume5026987.05559329.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 23.42 for the Electric Utilities industry and a discount compared to the S&P 500 average of 25.41. Conducting a second comparison, its price-to-book ratio of 1.90 indicates a discount versus the S&P 500 average of 2.83 and a premium versus the industry average of 1.69. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SO 18.58 Peers 23.42   SO 8.71 Peers 7.03

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SO is trading at a discount to its peers.

 

Premium. 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 premium 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 16.36 Peers 17.51   SO 1.66 Peers 4.57

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SO 1.90 Peers 1.69   SO 1.14 Peers 3.53

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 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SO 2.63 Peers 2.13   SO 1.92 Peers -1.77

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 premium to 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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