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It is one of the largest electric utility companies in the United States and the top energy firm servicing the Southeast market. Management expects to invest $14 billion between 2012 and 2014. The bulk of this capital will be invested in transmission, distribution and generation facilities and this is expected to boost earnings growth through an increase in efficiency and production. Southern Company's rate of returns is among the highest in the industry, and it is also a leader in power plant productivity, cost control and new technology research.

Additional reasons to consider Southern Company (NYSE:SO):

  • A strong relative strength score of 81 out of a possible 100
  • Operating cash flow of $5.47 billion
  • A decent yield of 4.2%
  • A low beta of 0.11
  • Five year sales growth rate of 3.18
  • Annual EPS before NRI rose from $2.24 in 2007 to $2.57 in 2011.
  • Cash flow increased from $4.62 in 2009 to $5.01 in 2011.
  • Net income rose from $1.7 billion to $2.2 billion in 2011.
  • A 3-5 year estimated EPS growth rate of 5.04%
  • It has consecutively increased its dividend for 11 years in a row.
  • Projected year over year growth rate of 3.02% and 6.32% in 2012 and 2013 respectively
  • $100K invested for 10 years would have grown to $214K. If the dividends were reinvested the rate of return would have been higher.
  • A decent interest coverage rate of 3.77

Company: Southern Company

Brief Overview

  1. Percentage Held by Insiders = 0.49
  2. Relative Strength 52 weeks = 81
  3. Cash Flow 5-year Average = 4.41
  4. Profit Margin = 12.46%
  5. Operating Margin = 24.02%
  6. Quarterly Revenue Growth = -10.2%
  7. Quarterly Earnings Growth = -12.8%
  8. Operating Cash Flow = 5.47B
  9. Beta = 0.11
  10. Percentage Held by Institutions = 43.4%
  11. Short Percentage of Float = 1.3%
  12. Levered Free Cash Flow = -656.00M

Growth

  1. Net Income ($mil) 12/2011 = 2268
  2. Net Income ($mil) 12/2010 = 2040
  3. Net Income ($mil) 12/2009 = 1708
  4. Net Income Reported Quarterly ($mil) = 368
  5. EBITDA ($mil) 12/2011 = 6392
  6. EBITDA ($mil) 12/2010 = 5792
  7. EBITDA ($mil) 12/2009 = 5297
  8. Cash Flow ($/share) 12/2011 = 5.01
  9. Cash Flow ($/share) 12/2010 = 4.66
  10. Cash Flow ($/share) 12/2009 = 4.62
  11. Sales ($mil) 12/2011 = 17657
  12. Sales ($mil) 12/2010 = 17456
  13. Sales ($mil) 12/2009 = 15743
  14. Annual EPS before NRI 12/2007 = 2.24
  15. Annual EPS before NRI 12/2008 = 2.37
  16. Annual EPS before NRI 12/2009 = 2.32
  17. Annual EPS before NRI 12/2010 = 2.37
  18. Annual EPS before NRI 12/2011 = 2.57

Dividend history

  1. Dividend Yield = 4.2
  2. Dividend Yield 5 Year Average = 4.6
  3. Dividend 5 year Growth = 3.8

Dividend sustainability

  1. Payout Ratio 03/2012 = 0.77
  2. Payout Ratio 5 Year Average = 0.74

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 5.04
  2. ROE 5 Year Average = 13.53
  3. Current Ratio = 0.96
  4. Current Ratio 5 Year Average = 0.98
  5. Quick Ratio = 0.61
  6. Cash Ratio = 0.41
  7. Interest Coverage Quarterly = 3.77

Interesting companies

For investors looking for other ideas detailed data has been provided on one more company. Our latest article could also provide some food for thought Philip Morris: 7% Extra In Addition To The Dividend

Company: Pepco Holdings (NYSE:POM)

Basic Key ratios

  1. Percentage Held by Insiders = 0.28
  2. Relative Strength 52 weeks = 64
  3. Short interest ratio= 12%
  4. Beta= 0.35
  5. Quarterly revenue growth = -20%
  6. 5 year dividend average = 5.5%
  7. Quarterly revenue growth = 6.2%
  8. Cash Flow 5 -year Average = 3.11
  9. Operating cash flow = $512M
  10. Levered Free Cash Flow = $- 272 million

Growth

  1. Net Income ($mil) 12/2011 = 257
  2. Net Income ($mil) 12/2010 = 32
  3. Net Income ($mil) 12/2009 = 235
  4. EBITDA ($mil) 12/2011 = 1089
  5. EBITDA ($mil) 12/2010 = 849
  6. EBITDA ($mil) 12/2009 = 1016
  7. Cash Flow ($/share) 12/2011 = 3.12
  8. Cash Flow ($/share) 12/2010 = 2.98
  9. Cash Flow ($/share) 12/2009 = 2.49
  10. Sales ($mil) 12/2011 = 5920
  11. Sales ($mil) 12/2010 = 7039
  12. Sales ($mil) 12/2009 = 9259
  13. Annual EPS before NRI 12/2007 = 1.53
  14. Annual EPS before NRI 12/2008 = 1.93
  15. Annual EPS before NRI 12/2009 = 0.91
  16. Annual EPS before NRI 12/2010 = 1.24
  17. Annual EPS before NRI 12/2011 = 1.25

Dividend history

  1. Dividend Yield = 5.50
  2. Dividend Yield 5 Year Average = 5.50
  3. Dividend 5 year Growth = 0.78

Dividend sustainability

  1. Payout Ratio = 0.93
  2. Payout Ratio 5 Year Average = 0.81

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4
  2. ROE 5 Year Average = 7.13
  3. Return on Investment = 3.2
  4. Debt/Total Cap 5 Year Average = 52.54
  5. Current Ratio = 0.60
  6. Current Ratio 5 Year Average = 0.95
  7. Quick Ratio = 0.4
  8. Cash Ratio = 0.2
  9. Interest Coverage Quarterly = 2.50

Conclusion

In general, a great way to get into a stock at a price of your choosing is to sell puts at strikes you would not mind owning the stock at. Investors looking for other ideas might find this article to be of interest An Interesting Combination Of Growth And Dividend Plays to consider.

EPS and Price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com. Earnings and growth estimates sourced from dailyfinace.com. Revenue by electricity service 2011 pie chart sourced from zacks.com.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware

Source: Southern Company: A Top Play In The Utility Sector