SOSO
US • —
$95.79
P/E
24.49
PEG
—
FCF Yield
—
Rev Growth YoY
+8.7% YoY
Gross Margin
40.0%
Health Score
5/10
D/E Ratio
2.02
Confidence
LOW
Business Snapshot
Southern Company (SO) is a major U.S. utility holding company primarily engaged in the generation, transmission, and distribution of electricity across the Southeast. It operates in a heavily regulated industry with a largely monopoly-like service footprint, providing a degree of revenue stability. The company's competitive position is defined by its regulated asset base and long-term infrastructure investments rather than market share battles. A defining characteristic is its capital-intensive nature, requiring continuous investment in generation, grid infrastructure, and compliance with environmental regulations.
Financial Health
Gross margin stands at 40.0%, but there is no prior year figure available to assess its trajectory. Net margin of 15.1% is reasonable for a regulated utility, reflecting predictable, though not spectacular, profitability...
Risk Assessment
- DEBT / LIQUIDITY — Debt/equity of 2.02x and a current ratio of 0.65x indicate a highly leveraged balance sheet and potential short-term liquidity risk.
- EARNINGS QUALITY — While earnings were beaten in 3/4 recent quarters, net income declined by 6.3% YoY, signaling a deterioration in underlying profitability.
- FCF / CASH BURN — Free cash flow is unavailable, creating a critical blind spot for assessing dividend safety and investment capability.
- VALUATION — P/E of 24.49x is above the sector average of 22x, offering a limited margin of safety relative to peers....
Gross margin stands at 40.0%, but there is no prior year figure available to assess its trajectory. Net margin of 15.1% is reasonable for a regulated utility, reflecting predictable, though not spectacular, profitability. The balance sheet is the primary concern, with a Debt/Equity ratio of 2.02x, indicating significant financial leverage and a stretched capital structure. This is compounded by a Current Ratio of 0.65x, which suggests potential liquidity pressures as current liabilities exceed current assets. Free cash flow data is unavailable, making it impossible to assess the company's cash generation capacity, a critical metric for a utility's ability to fund its dividend and capital expenditures. The high debt load and poor liquidity ratio present a cautious picture, limiting financial flexibility and increasing sensitivity to interest rate changes.
- DEBT / LIQUIDITY — Debt/equity of 2.02x and a current ratio of 0.65x indicate a highly leveraged balance sheet and potential short-term liquidity risk. - EARNINGS QUALITY — While earnings were beaten in 3/4 recent quarters, net income declined by 6.3% YoY, signaling a deterioration in underlying profitability. - FCF / CASH BURN — Free cash flow is unavailable, creating a critical blind spot for assessing dividend safety and investment capability. - VALUATION — P/E of 24.49x is above the sector average of 22x, offering a limited margin of safety relative to peers.
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