The Southern Company (SO) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: The Southern Company

Updated on October 25, 2026 · accounts published on July 30, 2026

Reading of October 23, 2026: A steadily growing regulated utility with firm margins and a heavy debt load

Southern trades at a P/E of 22.4 over the last 12 months, in line with its ten-year median and 5 % above the utilities sector median of 21.4.

• Is Southern expensive or cheap? At a P/E of 22.4, Southern sits right on its ten-year median and 5 % above the sector median of 21.4.
• How is the business doing? Revenue grew 11 % over the last 12 months and the operating margin of 24 % beats its 2014-2025 average of 22 %.
• How strong is the balance sheet? Net debt reached $68.67 per share in fiscal 2025, equal to 74 % of today's share price.
• Is the dividend sustainable with this debt? The fiscal 2025 payout of 70 % is below the 80 % ceiling, but interest coverage of 2.2× misses the 3.0× bar.
• What to expect from the next earnings? Analysts expect EPS of $1.71 when Southern reports on November 5, 2026, after beats in 6 of the last 8 quarters.

Is Southern expensive or cheap?

Over the last 12 months Southern trades at a P/E of 22.4, exactly its ten-year median, and the stock has traded at a lower P/E 52 % of the time over the past decade. The range has been wide, from 17.4 to 35.3, so today sits mid-range. Against 122 utilities, the multiple is 5 % above the sector median of 21.4. An earnings yield of 4.9 % and a P/B of 2.7× fit a stock priced for steady results. The shares are down 1 % over the last 12 months and sit 6 % below their 52-week high of $99.11.

How is the business doing?

Revenue rose 11 % over the last 12 months, yet EPS slipped 1.8 %, so the extra sales did not reach shareholders this year. Margins are not the problem: the operating margin of 24 % over the last 12 months is above the 22 % average of fiscal 2014-2025 and close to the 25 % of fiscal 2025, with a net margin of 15 %. Returns look like those of a capital-heavy utility. ROIC of 4.1 % over the last 12 months is 0.2 points above the sector median of 4.0 %, and it has not exceeded 10 % in any of the last ten fiscal years.

How strong is the balance sheet?

Southern carries a heavy balance sheet even by utility standards. Net debt of $68.67 per share in fiscal 2025 ($70.15 of debt against $1.49 of cash) is equal to 74 % of the current share price, and debt/equity stands at 2.0× over the last 12 months. Short-term liquidity is thin, with a current ratio of 0.8, and a Piotroski score of 4 out of 9 points to middling financial momentum. Interest coverage of 2.2× in fiscal 2025 is the weakest link: profits cover interest costs, but without a wide cushion if financing costs rise.

Is the dividend sustainable with this debt?

Utilities are regulated, slow-growth businesses bought for reliable dividends, almost bonds with extra growth, so the tests that matter are debt, interest costs and payout consistency rather than high returns. Southern's fiscal 2025 payout of 70 % sits under the 80 % healthy ceiling, and net debt/EBITDA of 5.1× passes the 5.5× limit, barely. Interest coverage of 2.2× fails the 3.0× bar. EPS grew 5.8 % a year in fiscal 2020-2025, inside the 4-7 % healthy range, but dividend growth of 2.4 % a year over 2015-2025 falls short of the 4 % benchmark. The 3.2 % yield looks covered; it is just growing slowly.

What to expect from the next earnings?

Southern reports next on November 5, 2026, and analysts expect EPS of $1.71 for the quarter. The track record helps: the company beat EPS estimates in 6 of the last 8 quarters, and on July 30, 2026 it reported $1.13 against $1.01 expected, a 12 % beat. Expectations are calm. The 2026 EPS consensus barely moved in the last 30 days, from $4.59 to $4.60 among 12 analysts, and the revenue consensus is also flat. Of the 34 analysts covering the stock, 11 rate it a buy, 20 a hold and 3 a sell, a lukewarm stance for a stock trading at its historical median.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.