The Southern Company (SO)
Quantitative Summary
DeterministicSO trades at 23.5x earnings, roughly in line with its sector average of 24.4x. Financial health is average: Piotroski 4/9, Altman Z 1.0.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of The Southern Company reveal a capital-intensive utility with an ROIC-WACC spread of -1.5%, indicating that the firm's current returns on invested capital fall short of its cost of equity, a structural characteristic often inherent to regulated infrastructure but one that limits organic value creation efficiency. Despite this negative spread, DuPont analysis shows total shareholder return is driven primarily by significant financial leverage rather than operational intensity; an Equity Multiplier of 4.01x amplifies returns despite only modest asset turnover at 0.19x and healthy net margins of 14.7%. Creditworthiness metrics present a mixed picture, with the company maintaining a strong Beneish M-Score of -2.69 suggesting low earnings manipulation risk, yet an Altman Z-Score of 1.0 flags potential financial distress concerns that warrant caution regarding long-term solvency under stress scenarios.
Valuation metrics suggest the market is pricing in above-average growth expectations relative to sector peers, as the current P/E of 24.9x trades at a premium to the utility sector average of 22.5x. This multiple expansion appears inconsistent with the company's weak profitability factor (RMW) score of -0.162 and its negative ROIC spread, implying that investors may be anticipating regulatory tailwinds or asset revaluation rather than relying on current operational efficiency to justify the premium. While revenue growth remains robust at 10.6% YoY, sustaining this trajectory while managing a deteriorating return profile will require disciplined capital allocation to avoid further erosion of shareholder value relative to cost of capital.
Risk-reward dynamics are complicated by divergent factor exposures and recent insider behavior; although the stock exhibits positive Fama-French alpha at 4.00% annually driven largely by its Value Factor tilt (HML: 0.395), the significant net insider selling of over $2.3 million in the last ninety days introduces a counterweight to fundamental optimism. This combination of strong historical factor performance against recent executive divestment suggests that while the stock may offer exposure to value characteristics, active ownership signals could reflect internal confidence issues not immediately visible in standard financial ratios.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
Valuation Context
Currently trading 6% above its 5-year average P/E of 23.3x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe stock's price has surpassed both its 50-day and 200-day moving averages, indicating a short-term bullish trend. With the RSI at 66.6, suggesting overbought conditions, there may be near-term pressure for consolidation or a pullback.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-18 | $0.7600 | +2.7% |
| 2026-02-17 | $0.7400 | 0.0% |
| 2025-11-17 | $0.7400 | 0.0% |
| 2025-08-18 | $0.7400 | 0.0% |
| 2025-05-19 | $0.7400 | +2.8% |
| 2025-02-18 | $0.7200 | 0.0% |
| 2024-11-18 | $0.7200 | 0.0% |
| 2024-08-19 | $0.7200 | 0.0% |
| 2024-05-17 | $0.7200 | +2.9% |
| 2024-02-16 | $0.7000 | 0.0% |
| 2023-11-17 | $0.7000 | 0.0% |
| 2023-08-18 | $0.7000 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLU or VPU, the fund manager is mechanically forced to buy or sell SO shares regardless of The Southern Company's individual fundamentals. We estimate $14.2B of passive capital is structurally linked to SO through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in The Southern Company to visualize passive redemption contagion across ETFs and collateral stocks.
If The Southern Company (SO) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies NEXTERA ENERGY INC (NEE) as the most exposed collateral stock, sharing 1 ETFs with SO. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 31 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
SO Ownership Dynamics
Passive funds hold 1 in every 7 SO shares, reducing daily market volatility.
The Southern Company (SO) exerts measurable gravity on the passive index market, currently representing 7.4% of the State Street Utilities Select Sector SPDR ETF (XLU) and 6.6% of the VPU (VPU). Across 28 tracked ETFs, approximately 151M shares (13.4% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest SO Exposure
Float lock-up computed from 28 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
SO Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for The Southern Company over the past year sits near $92.60 (10% of 252-day volume). The current price of $90.51 sits 2.3% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
SO Capital Efficiency
How efficiently does The Southern Company convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
The Southern Company converts -21% of its EBITDA into free cash flow, negative FCF conversion — the company is consuming cash faster than it generates EBITDA, which is unsustainable long-term. The 121% reinvestment rate signals aggressive capacity expansion. However, the ROIC-WACC spread is negative (-1.8%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 575 | $93.14 | $53,555.5 |
| 2026-05-11 | 16 | $91.80 | $1,468.8 |
| 2026-05-05 | 246,546 | $95.99 | $23.7M |
| 2026-05-04 | 4,582 | $96.71 | $443,125.22 |
| 2026-04-27 | 303 | $93.49 | $28,327.47 |
| 2026-04-20 | 150 | $94.51 | $14,176.5 |
| 2026-04-16 | 803 | $94.64 | $75,995.92 |
| 2026-04-15 | 9 | $95.96 | $863.64 |
| 2026-04-08 | 1,249 | $96.82 | $120,928.18 |
| 2026-04-06 | 151,967 | $97.45 | $14.8M |
| 2026-04-01 | 2,324 | $96.52 | $224,312.48 |
| 2026-03-31 | 4 | $96.93 | $387.72 |
| 2026-03-30 | 5,000 | $95.55 | $477,750 |
| 2026-03-26 | 2 | $94.61 | $189.22 |
| 2026-03-25 | 110 | $93.98 | $10,337.8 |
| 2026-03-24 | 57 | $93.75 | $5,343.75 |
| 2026-03-23 | 2,902 | $93.39 | $271,017.78 |
| 2026-03-18 | 1,670 | $98.27 | $164,110.9 |
| 2026-03-17 | 4,797 | $99.11 | $475,430.67 |
| 2026-03-13 | 96,539 | $97.84 | $9.4M |
| 2026-03-09 | 196 | $97.48 | $19,106.08 |
| 2026-03-05 | 251 | $97.63 | $24,505.13 |
| 2026-02-26 | 199 | $95.92 | $19,088.08 |
| 2026-02-25 | 616 | $95.81 | $59,018.96 |
| 2026-02-23 | 113 | $94.30 | $10,655.9 |
| 2026-02-20 | 5 | $95.05 | $475.25 |
| 2026-02-18 | 88 | $92.00 | $8,096 |
| 2026-02-17 | 35,484 | $94.95 | $3.4M |
| 2026-02-13 | 1,688 | $92.56 | $156,241.28 |
| 2026-02-12 | 134 | $90.86 | $12,175.24 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| DUK | 0.846 | 0.831 | High co-movement |
| CMS | 0.760 | 0.743 | High co-movement |
| AEE | 0.755 | 0.735 | High co-movement |
| WEC | 0.746 | 0.679 | High co-movement |
| ED | 0.743 | 0.669 | High co-movement |
| PNW | 0.725 | 0.709 | High co-movement |
| LNT | 0.721 | 0.718 | High co-movement |
| EXC | 0.721 | 0.638 | High co-movement |
| DTE | 0.721 | 0.696 | High co-movement |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare SO to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.