Southern SO
Southern Company is one of the largest electric utilities in the United States, operating as a regulated utility that generates, transmits, and distributes electricity and natural gas to millions of customers in the Southeast. Southern Company has a tight financial health (Net Debt/EBITDA of 5.20x) and weak cash generation (FCF yield of -4.10%), but its dividend is sustainable (payout of 71.81%) and earnings growth of 30.40% is notable, although the rise in interest rates pressures its valuation.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
Southern Company is one of the largest electric utilities in the United States, operating as a regulated utility that generates, transmits, and distributes electricity and natural gas to millions of customers in the Southeast. Southern Company has a tight financial health (Net Debt/EBITDA of 5.20x) and weak cash generation (FCF yield of -4.10%), but its dividend is sustainable (payout of 71.81%) and earnings growth of 30.40% is notable, although the rise in interest rates pressures its valuation.
Score by category
| Category | Score |
|---|---|
| Financial health | 5.7 |
| Quality / Moat | 4.1 |
| Valuation | 4.4 |
| Growth | 6.1 |
| Dividend | 7.1 |
| Momentum | 4.0 |
| Risk & Context | 8.4 |
OVERALL SCORE: 5.9/10
Context and risks
The rise in 10-year Treasury yields (5.17%) increases the cost of financing for a utility with Net Debt/EBITDA of 5.20x, a very high level that amplifies sensitivity to rates. However, as a regulated utility in the US, its regulated asset base allows it to partially pass on the higher cost of capital through tariffs, mitigating the impact.
News considered in the analysis
- The Math Doesn't Lie: What It Really Costs to Generate $300 in Dividend Income From Southern Company Stock — Artículo genérico sobre cómo generar ingresos por dividendos; sin información nueva sobre la empresa.
- Southern (SO) Signs Google Nuclear Deal As Valuation Upside Faces A Fresh Test — Acuerdo con Google para suministrar energía nuclear; materializa la demanda de centros de datos, pero el impacto en beneficios aún no está claro y la valoración ya refleja parte de las expectativas.
- America Needs More Electricity. Here’s What It Could Mean for DTE Energy — Artículo sobre DTE Energy, no sobre Southern Company; sin relevancia directa.
- VST Keeps Writing Checks To Its Shareholders — Artículo sobre Vistra Corp, no sobre Southern Company; sin relevancia directa.
- 4 Utility Stocks With Reliable Dividends and a Massive New Growth Engine — Listado genérico de acciones de utilities; sin información específica sobre Southern Company.
Verdict: Hold; high leverage and sensitivity to interest rates limit upside potential, but the dividend and earnings growth offer some appeal.
Main risk: The main risk is financial leverage (Net Debt/EBITDA of 5.20x) and its sensitivity to rising interest rates, which increases the cost of debt and pressures the balance sheet.
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