The Southern Company (SO)

FairStock Score: 51/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Southern as a regulated electric utility with a durable local franchise, but not a bargain. It sells electricity to retail and wholesale customers and has 29,502 employees. In fiscal year 2025, the year ended 2025-12-31, revenue was $28.9B and net income was $4.3B; in fiscal year 2024, the year ended 2024-12-31, revenue was $26.8B and net income was $4.4B. That is a stable utility profile, and a beta of 0.32 suggests lower volatility than the market. The moat is regulation, not free-market pricing, so returns depend on allowed rates and capital spending. Financial health is the weak spot: debt-to-equity is 1.82, trailing free cash flow is -$3.3B, FCF yield is -3.1%, and FairStock's Altman Z-score is 0.71. FairStock's ROE is 11.48%, but ROCE is just 3.27%. Growth is slow; FairStock classifies SO as a SLOW GROWER, with 6.9% annual profit growth and 6.5% revenue growth over five years. Filed numbers show revenue of $24.8B in fiscal year 2023, the year ended 2023-12-31, and $28.9B in fiscal year 2025, the year ended 2025-12-31; net income in fiscal year 2025, the year ended 2025-12-31, was $4.3B, below $4.4B in fiscal year 2024, the year ended 2024-12-31, and diluted EPS slipped from $3.99 to $3.92. At the 2026-10-26 close of $92.57, FairStock's P/E is 22.31, P/B is 2.69, and its Graham Number is $56.68, with a margin of safety of -63.88%. The 3.55% dividend is attractive, but on Graham terms there is no margin of safety.

In plain English: Southern Company sells electricity to homes and businesses through electric utilities and also offers energy-related products and services. The business looks stable and pays a 3.55% dividend, but it carries a lot of debt and spends more cash than it brings in after investment. At $92.57, the price looks expensive compared with the company's accounting value and a conservative value estimate.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · fiscal Q1 2025 10-Q (period ended 2025-03-31) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer