Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

The Southern Company (SO)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$66.01 - $130.35$91.30
Multi-Stage$95.10 - $104.24$99.59
Blended Fair Value$95.44
Current Price$94.77
Upside0.71%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.82%4.70%2.672.742.622.512.422.322.192.081.901.77
YoY Growth---2.67%4.40%4.68%3.43%4.47%5.98%5.43%9.32%7.40%4.98%
Dividend Yield--2.90%3.85%3.77%3.46%3.90%4.28%4.26%4.65%3.81%3.42%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)4,459.00
(-) Cash Dividends Paid (M)2,988.00
(=) Cash Retained (M)1,471.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)891.80557.38334.43
Cash Retained (M)1,471.001,471.001,471.00
(-) Cash Required (M)-891.80-557.38-334.43
(=) Excess Retained (M)579.20913.631,136.58
(/) Shares Outstanding (M)1,108.131,108.131,108.13
(=) Excess Retained per Share0.520.821.03
LTM Dividend per Share2.702.702.70
(+) Excess Retained per Share0.520.821.03
(=) Adjusted Dividend3.223.523.72
WACC / Discount Rate6.73%6.73%6.73%
Growth Rate1.76%2.76%3.76%
Fair Value$66.01$91.30$130.35
Upside / Downside-30.35%-3.66%37.55%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)4,459.004,582.294,708.984,839.184,972.985,110.485,263.79
Payout Ratio67.01%71.61%76.21%80.80%85.40%90.00%92.50%
Projected Dividends (M)2,988.003,281.303,588.543,910.264,247.034,599.434,869.01

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.73%6.73%6.73%
Growth Rate1.76%2.76%3.76%
Year 1 PV (M)3,044.543,074.463,104.38
Year 2 PV (M)3,089.363,150.383,211.99
Year 3 PV (M)3,123.433,216.423,311.23
Year 4 PV (M)3,147.653,273.213,402.49
Year 5 PV (M)3,162.873,321.353,486.13
PV of Terminal Value (M)89,816.8594,317.4098,996.57
Equity Value (M)105,384.71110,353.22115,512.78
Shares Outstanding (M)1,108.131,108.131,108.13
Fair Value$95.10$99.59$104.24
Upside / Downside0.35%5.08%9.99%

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