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Southern Co. (SO) Outpaces Stock Market Gains: What You Should Know

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Southern Co. (SO - Free Report) closed at $61.59 in the latest trading session, marking a +0.74% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.69%. Meanwhile, the Dow gained 0.22%, and the Nasdaq, a tech-heavy index, added 0.91%.

Prior to today's trading, shares of the power company had gained 0.13% over the past month. This has lagged the Utilities sector's gain of 0.52% and outpaced the S&P 500's loss of 0.61% in that time.

Wall Street will be looking for positivity from SO as it approaches its next earnings report date. This is expected to be October 30, 2019. In that report, analysts expect SO to post earnings of $1.12 per share. This would mark a year-over-year decline of 1.75%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.93 billion, down 3.66% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.06 per share and revenue of $21.79 billion, which would represent changes of -0.33% and -7.27%, respectively, from the prior year.

Any recent changes to analyst estimates for SO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.55% higher. SO is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note SO's current valuation metrics, including its Forward P/E ratio of 19.98. Its industry sports an average Forward P/E of 21.07, so we one might conclude that SO is trading at a discount comparatively.

It is also worth noting that SO currently has a PEG ratio of 4.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Utility - Electric Power stocks are, on average, holding a PEG ratio of 3.91 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 79, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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