Back to top

Image: Bigstock

Southern Co. (SO) Laps the Stock Market: Here's Why

Read MoreHide Full Article

Southern Co. (SO - Free Report) ended the recent trading session at $78.69, demonstrating a +0.32% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily gain of 0.23%. Meanwhile, the Dow lost 0.17%, and the Nasdaq, a tech-heavy index, added 0.34%.

The power company's stock has dropped by 1.07% in the past month, exceeding the Utilities sector's loss of 3.42% and lagging the S&P 500's gain of 3.96%.

Analysts and investors alike will be keeping a close eye on the performance of Southern Co. in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.90, reflecting a 13.92% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.23 billion, up 8.34% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.99 per share and a revenue of $27.35 billion, signifying shifts of +9.32% and +8.31%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Southern Co. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.21% higher. Currently, Southern Co. is carrying a Zacks Rank of #3 (Hold).

Investors should also note Southern Co.'s current valuation metrics, including its Forward P/E ratio of 19.64. Its industry sports an average Forward P/E of 15.13, so one might conclude that Southern Co. is trading at a premium comparatively.

Investors should also note that SO has a PEG ratio of 2.83 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Utility - Electric Power industry held an average PEG ratio of 2.57.

The Utility - Electric Power industry is part of the Utilities sector. Currently, this industry holds a Zacks Industry Rank of 91, positioning it in the top 37% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Southern Company (The) (SO) - free report >>

Published in