SO Southern Co

The Southern Company is one of the largest US electric utilities, providing electricity to millions of customers across Georgia, Alabama, Mississippi, and Florida. Sector: Utilities.

Southern Co (SO) is an individual stock. The analysis below presents key financial metrics for the company, covering profitability, capital efficiency, valuation, margins, and growth.

On the question of capital productivity, ROIC is 4.32%, WACC is 5.27%, and the economic spread is -0.95%. On balance, the spread between returns and funding costs is negative — a dynamic that pressures intrinsic value unless operating performance improves. Supporting metrics show ROE at 11.82% and ROA at 3.08%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a company that likely needs operating improvement before returns quality can be considered durable.

Assessed on a multiple basis, trailing P/E of 24.86, forward P/E of 21.34, PEG of 2.71. Forward P/E tracks closely with trailing P/E — a sign that the market sees the current earnings run rate as a reasonable baseline going forward. At this PEG level, the valuation case rests more on quality, scarcity, or market leadership than on earnings growth alone. The company carries an aggregate current ratio of 0.65, pointing to constrained near-term balance sheet coverage. Overall, the valuation setup reads as a balance between expected growth and execution risk, with liquidity acting as an important stabilizer if macro conditions become less favorable.

The margin stack reads as follows: gross margin sits at 48.47%, operating margin at 25.68%, and free cash flow margin at -9.93%. The gross margin reading points to the company with solid but not outsized pricing power relative to direct costs. The company's operating margins are solid, pointing to overhead management that appears to be a relative strength. FCF margins are negligible or negative, indicating businesses where cash generation has not yet caught up with operational or growth spending. The profile is not weak, but it is uneven enough that execution and cost control remain central to the forward case.

The forward view combines two signals: the estimated 12-month price change of 1.33%, where analyst estimates suggest only incremental upside absent a positive surprise, while TTM revenue growth of 10.09% suggesting the company is growing revenues at a measured, sustainable pace. The projected 12-month EPS growth rate of 16.5% is a standout component of the forward case — meaningful earnings expansion at this scale typically warrants attention from growth-oriented investors. One metric reflects operational reality, the other market expectation — both are useful inputs, but neither should be read in isolation. The interaction between revenue execution and analyst repricing will ultimately determine how closely realized returns track current expectations. The estimated 12-month price change is based on analyst consensus price target estimates, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

There is enough quality in the profile to avoid outright concern, but not enough uniform strength to take high conviction in a direction. Patience has merit here.

This summary is based on publicly available quantitative data and is not intended as investment advice. Carefully consider your personal financial circumstances before making any decisions.