Southern (SO)
Market Price (9/30/2026): $83.28 | Market Cap: $94.7 BilInvestor Relations Sector: Utilities | Industry: Electric Utilities
Southern (SO)
Market Price (9/30/2026): $83.28Market Cap: $94.7 BilSector: UtilitiesIndustry: Electric Utilities
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.2%, Dividend Yield is 3.3%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.4% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 35%, CFO LTM is 11 Bil Low stock price volatilityVol 12M is 17% Megatrend and thematic driversMegatrends include Renewable Energy Transition, Smart Grids & Grid Modernization, Electrification of Everything, Energy Transition & Decarbonization, Show more. | Weak multi-year price returns2Y Excs Rtn is -35%, 3Y Excs Rtn is -44% | Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 78% Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -11% Key risksSO key risks include [1] a significant debt burden and execution risk on large-scale construction projects, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.2%, Dividend Yield is 3.3%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.4% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 35%, CFO LTM is 11 Bil |
| Low stock price volatilityVol 12M is 17% |
| Megatrend and thematic driversMegatrends include Renewable Energy Transition, Smart Grids & Grid Modernization, Electrification of Everything, Energy Transition & Decarbonization, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -35%, 3Y Excs Rtn is -44% |
| Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 78% |
| Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -11% |
| Key risksSO key risks include [1] a significant debt burden and execution risk on large-scale construction projects, Show more. |
Qualitative Assessment
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Southern (SO) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. The Federal Reserve's interest rate hike in September 2026 increased Southern Company's cost of capital and reduced the relative attractiveness of its dividend. The Federal Reserve unanimously voted to raise the federal funds rate target range by 25 basis points to 3.75%–4.00% on September 16, 2026, marking the first rate hike in over three years. Policymakers signaled the possibility of additional rate increases in 2026, creating a "higher for longer" interest rate environment. As a capital-intensive utility, Southern Company's borrowing costs are influenced by these rates, while rising bond yields make dividend-paying utility stocks less appealing to income-focused investors.
2. Southern Company's fiscal Q2 2026 earnings report revealed a revenue miss, coupled with ongoing cash flow pressures from wind repowering and Nicor Gas disallowances. Although Southern Company reported adjusted earnings per share of $1.13 for fiscal Q2 2026 (ended June 30, 2026), beating the consensus estimate of $1.01, its revenue of $6.98 billion fell short of analysts' expectations of $7.23 billion. Additionally, the company faces a projected cash drag of approximately $205 million in fiscal 2026 due to accelerated depreciation related to Southern Power wind repowering and capital investment disallowances by the Illinois Commerce Commission for Nicor Gas. These factors put pressure on the company's cash flow.
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Southern (SO) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. The Federal Reserve's interest rate hike in September 2026 increased Southern Company's cost of capital and reduced the relative attractiveness of its dividend. The Federal Reserve unanimously voted to raise the federal funds rate target range by 25 basis points to 3.75%–4.00% on September 16, 2026, marking the first rate hike in over three years. Policymakers signaled the possibility of additional rate increases in 2026, creating a "higher for longer" interest rate environment. As a capital-intensive utility, Southern Company's borrowing costs are influenced by these rates, while rising bond yields make dividend-paying utility stocks less appealing to income-focused investors.
2. Southern Company's fiscal Q2 2026 earnings report revealed a revenue miss, coupled with ongoing cash flow pressures from wind repowering and Nicor Gas disallowances. Although Southern Company reported adjusted earnings per share of $1.13 for fiscal Q2 2026 (ended June 30, 2026), beating the consensus estimate of $1.01, its revenue of $6.98 billion fell short of analysts' expectations of $7.23 billion. Additionally, the company faces a projected cash drag of approximately $205 million in fiscal 2026 due to accelerated depreciation related to Southern Power wind repowering and capital investment disallowances by the Illinois Commerce Commission for Nicor Gas. These factors put pressure on the company's cash flow.
3. Multiple analyst firms downgraded Southern Company's stock or reduced their price targets during the period. This shift in analyst sentiment contributed to negative investor perceptions. For instance, KeyCorp downgraded Southern Company from a "sector weight" rating to an "underweight" rating with a $79.00 price target on July 23, 2026. Truist Financial cut its price objective from $100.00 to $97.00 in August 2026, maintaining a "hold" rating. Furthermore, Morgan Stanley reduced its price target from $89.00 to $85.00 and reiterated an "underweight" rating on September 18, 2026.
4. Rising natural gas prices likely increased concerns over Southern Company's operating expenses. After remaining relatively low earlier in the period, natural gas prices began to climb. The Henry Hub spot price rose to $3.060 on September 23, 2026, and increased to $3.20 USD/MMBtu by September 24, 2026, representing a 13.39% increase over the past month. Forecasts for September 2026 indicated an average Henry Hub price of $3.205 and an end-of-month price of $3.460, an 18.3% increase from the start of the month. For a utility like Southern Company, which relies on natural gas for power generation, rising fuel costs can negatively impact profitability if not fully offset by rate adjustments or hedging strategies.
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Stock Movement Drivers
Fundamental Drivers
The -8.6% change in SO stock from 5/31/2026 to 9/29/2026 was primarily driven by a -13.4% change in the company's P/E Multiple.| (LTM values as of) | 5312026 | 9292026 | Change |
|---|---|---|---|
| Stock Price ($) | 91.30 | 83.45 | -8.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 30,174 | 30,178 | 0.0% |
| Net Income Margin (%) | 14.5% | 15.4% | 6.7% |
| P/E Multiple | 23.5 | 20.4 | -13.4% |
| Shares Outstanding (Mil) | 1,124 | 1,137 | -1.1% |
| Cumulative Contribution | -8.6% |
Market Drivers
5/31/2026 to 9/29/2026| Return | Correlation | |
|---|---|---|
| SO | -8.6% | |
| Market (SPY) | 1.3% | -21.7% |
| Sector (XLU) | -10.0% | 84.0% |
Fundamental Drivers
The -12.9% change in SO stock from 2/28/2026 to 9/29/2026 was primarily driven by a -16.7% change in the company's P/E Multiple.| (LTM values as of) | 2282026 | 9292026 | Change |
|---|---|---|---|
| Stock Price ($) | 95.79 | 83.45 | -12.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 29,552 | 30,178 | 2.1% |
| Net Income Margin (%) | 14.7% | 15.4% | 5.1% |
| P/E Multiple | 24.5 | 20.4 | -16.7% |
| Shares Outstanding (Mil) | 1,109 | 1,137 | -2.5% |
| Cumulative Contribution | -12.9% |
Market Drivers
2/28/2026 to 9/29/2026| Return | Correlation | |
|---|---|---|
| SO | -12.9% | |
| Market (SPY) | 12.0% | -10.2% |
| Sector (XLU) | -15.7% | 85.3% |
Fundamental Drivers
The -6.6% change in SO stock from 8/31/2025 to 9/29/2026 was primarily driven by a -11.3% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 9292026 | Change |
|---|---|---|---|
| Stock Price ($) | 89.35 | 83.45 | -6.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 28,363 | 30,178 | 6.4% |
| Net Income Margin (%) | 15.1% | 15.4% | 2.2% |
| P/E Multiple | 23.0 | 20.4 | -11.3% |
| Shares Outstanding (Mil) | 1,101 | 1,137 | -3.2% |
| Cumulative Contribution | -6.6% |
Market Drivers
8/31/2025 to 9/29/2026| Return | Correlation | |
|---|---|---|
| SO | -6.6% | |
| Market (SPY) | 19.8% | -16.6% |
| Sector (XLU) | -3.2% | 76.2% |
Fundamental Drivers
The 36.6% change in SO stock from 8/31/2023 to 9/29/2026 was primarily driven by a 38.1% change in the company's Net Income Margin (%).| (LTM values as of) | 8312023 | 9292026 | Change |
|---|---|---|---|
| Stock Price ($) | 61.08 | 83.45 | 36.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 27,653 | 30,178 | 9.1% |
| Net Income Margin (%) | 11.2% | 15.4% | 38.1% |
| P/E Multiple | 21.6 | 20.4 | -5.6% |
| Shares Outstanding (Mil) | 1,092 | 1,137 | -4.0% |
| Cumulative Contribution | 36.6% |
Market Drivers
8/31/2023 to 9/29/2026| Return | Correlation | |
|---|---|---|
| SO | 36.6% | |
| Market (SPY) | 76.1% | 1.2% |
| Sector (XLU) | 38.1% | 75.9% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| SO Return | 16% | 8% | 2% | 22% | 9% | -3% | 66% |
| Peers Return | 16% | -2% | -13% | 26% | 19% | 3% | 53% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 12% | 105% |
Monthly Win Rates [3] | |||||||
| SO Win Rate | 50% | 67% | 50% | 58% | 50% | 44% | |
| Peers Win Rate | 58% | 58% | 50% | 62% | 65% | 51% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 44% | |
Max Drawdowns [4] | |||||||
| SO Max Drawdown | -8% | -23% | -15% | -13% | -15% | -16% | |
| Peers Max Drawdown | -13% | -26% | -27% | -13% | -12% | -16% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: DUK, NEE, D, AEP, ETR. See SO Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 9/29/2026 (YTD)
How Low Can It Go
| Event | SO | S&P 500 |
|---|---|---|
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -12.7% | -9.5% |
| % Gain to Breakeven | 14.6% | 10.5% |
| Time to Breakeven | 60 days | 24 days |
| 2020 COVID-19 Crash | ||
| % Loss | -37.0% | -33.7% |
| % Gain to Breakeven | 58.7% | 50.9% |
| Time to Breakeven | 393 days | 140 days |
| 2016-2017 Trump Reflation Bond Selloff | ||
| % Loss | -10.6% | -3.7% |
| % Gain to Breakeven | 11.8% | 3.9% |
| Time to Breakeven | 182 days | 6 days |
| 2013 Taper Tantrum | ||
| % Loss | -13.5% | -0.2% |
| % Gain to Breakeven | 15.6% | 0.2% |
| Time to Breakeven | 191 days | 1 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -27.3% | -53.4% |
| % Gain to Breakeven | 37.5% | 114.4% |
| Time to Breakeven | 412 days | 1085 days |
In The Past
Southern's stock fell -1.8% during the 2025 US Tariff Shock. Such a loss loss requires a 1.8% gain to breakeven.
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Asset Allocation
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| Event | SO | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -37.0% | -33.7% |
| % Gain to Breakeven | 58.7% | 50.9% |
| Time to Breakeven | 393 days | 140 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -27.3% | -53.4% |
| % Gain to Breakeven | 37.5% | 114.4% |
| Time to Breakeven | 412 days | 1085 days |
In The Past
Southern's stock fell -1.8% during the 2025 US Tariff Shock. Such a loss loss requires a 1.8% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Southern (SO)
Southern Company (SO) is a large energy company primarily focused on the generation, transmission, and distribution of electricity, complemented by significant natural gas operations. Through its various subsidiaries, the company manages everything from power production and delivery to natural gas infrastructure and supply. Its operations are segmented across gas distribution, gas pipeline investments, wholesale gas services, and gas marketing, indicating a comprehensive involvement in both the electric and natural gas utility sectors.
The company's core products and services revolve around providing essential energy. For electricity, Southern Company operates a diverse portfolio of generation assets, including hydroelectric, fossil fuel, nuclear, solar, wind, and battery storage facilities, selling power to both retail and wholesale markets. In its natural gas business, it distributes natural gas through an extensive network of pipelines and storage facilities, also providing gas marketing and wholesale services. Additionally, Southern Company offers some digital wireless communications and fiber optics services.
Southern Company serves a substantial customer base, totaling approximately 8.7 million electric and gas utility customers. These customers span residential, commercial, and industrial sectors. Its natural gas distribution services primarily reach customers in Illinois, Georgia, Virginia, and Tennessee, while its electricity operations cover a broader region. The company's market focus is on delivering reliable energy and utility services to communities and businesses within its service territories.
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- Southern Company is like Con Edison (ED), but scaled up to serve millions of electricity and natural gas customers across multiple U.S. states.
- Think of it as a huge, diversified energy provider similar to NextEra Energy (NEE), but with a massive integrated natural gas distribution and pipeline business in addition to its electricity operations.
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- Electricity Generation, Transmission, and Distribution: Provides electricity to retail and wholesale markets.
- Natural Gas Distribution: Delivers natural gas to residential, commercial, and industrial customers.
- Wholesale Gas Services: Provides natural gas to wholesale customers.
- Gas Marketing Services: Markets and sells natural gas products and services.
- Gas Pipeline Investments: Involves investment in and management of natural gas pipeline infrastructure.
- Digital Wireless Communications Services: Offers digital wireless communication solutions.
- Fiber Optics Services: Provides fiber optic infrastructure and related services.
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The Southern Company (SO) primarily sells electricity and natural gas directly to end-users. Its major customer categories are:
- Residential customers
- Commercial customers
- Industrial customers
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Christopher C. Womack, Chairman of the Board, President and Chief Executive Officer
Christopher C. Womack has over 35 years of experience in the U.S. energy sector. He has held various leadership positions within Southern Company, including senior vice president of Human Resources and chief people officer, and president of External Affairs. Prior to his current role, he served as chairman, president and CEO of Georgia Power, Southern Company's largest subsidiary. Womack joined Southern Company in 1988. He also served as executive vice president of external affairs at Georgia Power, senior vice president and senior production officer of Southern Company Generation, senior vice president of human resources and chief people officer at Southern Company, and senior vice president of public relations and corporate services at Alabama Power. Before joining Southern Company, he worked on Capitol Hill for the U.S. House of Representatives.
David P. Poroch, Executive Vice President and Chief Financial Officer
David P. Poroch joined Southern Company in 2012. He previously served as senior vice president, comptroller and chief accounting officer of Southern Company. Prior to that, he held CFO positions at Georgia Power and Southern Company Gas. Before joining Southern Company, Poroch was a partner at Deloitte & Touche LLP, with nearly two decades of experience in the utility sector. He has also served as chief audit executive for Southern Company Services.
Stan W. Connally, Jr., Executive Vice President, Chief Operating Officer
Stan W. Connally, Jr. served as chairman, president and CEO of former subsidiary Gulf Power from 2012 to 2018. He has held senior leadership roles at each of the system's regulated electric operating companies, including senior vice president and senior production officer for Georgia Power, where he was responsible for fossil and hydroelectric generation. He joined Southern Company in 1989 as a co-op engineering student at Plant Yates.
Sloane Drake, Executive Vice President and Chief Human Resources Officer
Sloane Drake is the Executive Vice President and Chief Human Resources Officer for Southern Company.
Sterling Spainhour, Executive Vice President, Chief Legal Officer
Sterling Spainhour previously served as senior vice president, general counsel and chief compliance officer for Georgia Power, and as senior vice president and general counsel of Southern Company Services. Before joining Southern Company, Spainhour was a partner at Jones Day, focusing on mergers, acquisitions and corporate governance, and served as counsel for CNN.
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- Regulatory and Policy Shifts Towards Decarbonization and Clean Energy Transition: As a utility with significant investments in fossil fuel generation (24 fossil fuel generating stations) and three nuclear generating stations, Southern Company is highly susceptible to changes in environmental regulations, carbon emission standards, and broader energy policies favoring decarbonization. Stricter mandates, carbon pricing, or accelerated shifts to renewable energy could render existing assets uneconomical prematurely, require substantial capital investment for compliance, or force costly operational changes. The transition to a cleaner energy grid, while an area of investment for the company, presents a continuous risk regarding the pace, cost, and technological challenges involved.
- Large Capital Project Execution Risk: Southern Company's business involves developing, constructing, acquiring, owning, and managing power generation assets, including renewable energy projects. Large-scale construction and infrastructure projects in the utility sector are often complex, long-duration endeavors that are prone to cost overruns, schedule delays, and unforeseen technical challenges. Such issues can significantly impact the company's financial performance, regulatory cost recovery, and shareholder value, as evidenced by historical projects within the industry and for Southern Company specifically.
- Impacts of Climate Change and Extreme Weather Events: The company operates extensive physical infrastructure, including 76,289 miles of natural gas pipelines, numerous power plants, and electricity transmission and distribution networks. This infrastructure is vulnerable to physical damage and operational disruptions caused by increasingly frequent and intense extreme weather events, such as hurricanes, severe storms, heatwaves, and wildfires, which are exacerbated by climate change. These events can lead to significant repair and restoration costs, prolonged service outages, increased operational expenses for emergency response, and potential liabilities, directly impacting financial performance and reliability.
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Widespread adoption of distributed energy resources (such as rooftop solar, community microgrids, and battery storage) by residential, commercial, and industrial customers. This trend allows consumers to generate and store their own electricity, reducing their reliance on the traditional centralized grid for generation and potentially transmission services, thereby threatening the core revenue streams of a traditional utility like Southern Company.
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Electricity Services
The addressable market for Southern Company's electricity services can be measured by its total operating revenues from electricity sales within its service territories. For 2024, Southern Company reported the following:- Retail Electric Revenues: $18,877 million (U.S. Region: Alabama, Georgia, and Mississippi)
- Wholesale Electric Revenues: $1,926 million (U.S. Region: primarily across the country, served by Southern Power)
Natural Gas Distribution Services
The addressable market for Southern Company's natural gas distribution services can be measured by its total operating revenues from natural gas distribution and the broader U.S. natural gas distribution market.- Natural Gas Distribution Revenues: $3,815 million (U.S. Region: Illinois, Georgia, Virginia, and Tennessee)
- Other Natural Gas Revenues (including marketing services): $525 million (U.S. Region: Illinois, Georgia, Virginia, and Tennessee, and other marketing service areas)
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Southern Company (SO) is expected to experience future revenue growth over the next two to three years driven by several key factors:
- Robust Electric Load Growth from Data Centers and Industrial Expansion: Southern Company anticipates significant growth in electric sales, particularly from the expansion of data centers and increased industrial development across its service territories in the Southeast. The company projects electric load growth of around 8% between 2025 and 2029, with retail electric sales growth of at least 3% in 2026 and a powerful 10% average annual retail electricity sales growth from 2026 to 2030. Georgia Power, a subsidiary, is specifically projected to see approximately 13% average annual growth in total retail electric sales over the same period, underscoring its central role in supplying power for the region's expanding economy and data center build-out.
- Substantial Capital Investments in Regulated Utilities and Infrastructure Modernization: The company has outlined a significant multi-year capital investment plan, including an $81 billion base capital plan over the next five years, with approximately 95% allocated to state-regulated utilities. These investments target grid modernization, transmission system upgrades, and new generation facilities, which are expected to drive approximately 9% average annual regulated rate-base growth through 2030. This growth in the rate base forms a cornerstone of the company's financial outlook and supports its long-term growth plan.
- Expansion of Renewable Energy and Battery Storage Systems: Southern Company is actively investing in and acquiring renewable assets, including major solar-plus-storage projects. The company's 2025 Integrated Resource Plan for Georgia Power also outlines plans to procure 4,000 MW of renewable energy by 2035, with 1,100 MW proposed in this plan, and to add over 1,500 MW of battery energy storage in the coming years. These initiatives contribute to revenue diversification and meet the evolving demand for cleaner energy solutions.
- Customer Growth and Increased Usage in Electric and Gas Businesses: Beyond large industrial customers, Southern Company continues to experience growth in its residential electric and natural gas customer base, alongside increased usage. For instance, the company added 57,000 residential electric customers and 26,000 natural gas customers during 2024. In Q2 2025, retail electricity sales grew by 3%, with notable increases in residential and industrial sectors, and the company added over 15,000 new electric customers. This consistent customer acquisition and increased demand contribute to overall revenue growth.
- Development of New Generation Facilities, Including Nuclear and Natural Gas: The completion of Vogtle Unit 4 in April 2024 added 2,200 MW of zero-carbon baseload power, significantly bolstering grid reliability and serving as a cornerstone of the company's decarbonization strategy. Furthermore, Southern Company is undertaking construction of 2.5 gigawatts of new generation in Georgia and Alabama, including natural gas and battery storage, scheduled to come online within two years. These new generation facilities expand capacity and contribute to the company's ability to meet growing energy demand and drive revenue.
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Capital Allocation Decisions (Last 3-5 Years) for Southern Company (SO)
Share Repurchases
- Southern Company intends to use a portion of the net proceeds from a November 2025 equity units offering to repurchase a portion of its Series 2023A Convertible Senior Notes due December 15, 2025, and Series 2024A Convertible Senior Notes due June 15, 2027.
- As of December 31, 2025, Southern Company's quarterly stock buybacks reflected a value of -1.533 billion.
- The company's buyback yield stood at -0.64% as of March 2026.
Share Issuance
- In November 2025, Southern Company completed a public offering of 40,000,000 equity units, generating $2 billion in gross proceeds, which included the full exercise of the underwriters' over-allotment option.
- This offering initially planned to sell 35 million equity units for an aggregate stated amount of $1.75 billion, with an option for underwriters to purchase an additional 5 million units ($250 million).
- As of August 2025, the company had also utilized $1.2 billion in at-the-market (ATM) equity issuances to support capital structure resilience.
Inbound Investments
- Southern Company and its subsidiaries secured a historic $26.5 billion loan package from the U.S. Department of Energy (DOE) in February 2026, aimed at enhancing power generation and grid reliability.
Capital Expenditures
- Southern Company has increased its five-year capital spending plan to $81 billion for 2026-2030, marking an $18 billion or approximately 30% increase from its forecast just one year prior.
- This expanded capital plan is primarily driven by significant new growth infrastructure investments to meet surging electricity demand, particularly from hyperscale data centers and industrial customers across Alabama, Georgia, and Mississippi.
- Approximately $42 billion of the $81 billion capital plan through 2030 is allocated to generation, modernization, and transmission projects, with 95% directed to state-regulated utilities.
Peer Outperformance in Electric Utilities
| Ticker | Name | Rev Growth 3Y Avg | P/E | 1Y | 3Y | 5Y | 5Y Gap |
|---|---|---|---|---|---|---|---|
| SO | Southern | 3.1% | 20.4x | -8.2% | 43.0% | 61.7% | — |
| VST | Vistra | 6.7% | 21.4x | -28.4% | 335.4% | 797.4% | +736pp |
| ETR | Entergy | 0.7% | 25.2x | 9.3% | 137.8% | 141.6% | +80pp |
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Independent Power Producers & Energy Traders | 5 | -25.2% | 104.8% | 171.4% | HNRG 376% · OKLO 278% · NRG 171% |
| Electric Utilities ← | 24 | 0.0% | 44.6% | 41.3% | VST 797% · GNE 178% · ETR 142% |
| Gas Utilities | 10 | -2.1% | 46.0% | 40.9% | ATO 102% · NJR 75% · NFG 69% |
| Multi-Utilities | 18 | -1.2% | 44.2% | 40.3% | MDU 96% · NI 91% · OGE 70% |
| Water Utilities | 11 | 3.2% | 4.6% | -13.1% | CWCO 168% · AWR 7% · HTO 7% |
| Renewable Electricity | 4 | -54.9% | -66.0% | -34.4% | ORA 41% · CWEN 26% · AGIG -95% |
Latest Trefis Analyses
Research & Analysis
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Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 91.49 |
| Mkt Cap | 77.0 |
| Rev LTM | 25,746 |
| Op Inc LTM | 6,322 |
| FCF LTM | -3,284 |
| FCF 3Y Avg | -2,045 |
| CFO LTM | 9,172 |
| CFO 3Y Avg | 8,137 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 9.9% |
| Rev Chg 3Y Avg | 3.9% |
| Rev Chg Q | 6.4% |
| QoQ Delta Rev Chg LTM | 1.5% |
| Op Inc Chg LTM | 4.7% |
| Op Inc Chg 3Y Avg | 10.6% |
| Op Mgn LTM | 25.4% |
| Op Mgn 3Y Avg | 25.9% |
| QoQ Delta Op Mgn LTM | -0.1% |
| CFO/Rev LTM | 35.0% |
| CFO/Rev 3Y Avg | 35.5% |
| FCF/Rev LTM | -11.8% |
| FCF/Rev 3Y Avg | -8.0% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 77.0 |
| P/S | 3.0 |
| P/Op Inc | 12.6 |
| P/EBIT | 11.3 |
| P/E | 20.5 |
| P/CFO | 8.7 |
| Total Yield | 8.2% |
| Dividend Yield | 3.2% |
| FCF Yield 3Y Avg | -2.8% |
| D/E | 0.8 |
| Net D/E | 0.8 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -5.7% |
| 3M Rtn | -12.1% |
| 6M Rtn | -10.7% |
| 12M Rtn | 3.2% |
| 3Y Rtn | 50.7% |
| 1M Excs Rtn | -5.1% |
| 3M Excs Rtn | -14.4% |
| 6M Excs Rtn | -31.4% |
| 12M Excs Rtn | -11.5% |
| 3Y Excs Rtn | -35.9% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Traditional Electric Operating Companies | 22,056 | 19,977 | 18,358 | 20,408 | 16,614 |
| Southern Company Gas | 5,044 | 4,456 | 4,702 | 5,962 | 4,380 |
| Southern Power | 2,198 | 2,014 | 2,189 | 3,369 | 2,216 |
| All Other | 893 | 843 | 718 | 593 | 582 |
| Eliminations | -161 | -178 | -165 | -149 | -149 |
| Electric Utilities-Eliminations | -477 | -388 | -549 | -904 | -530 |
| Total | 29,553 | 26,724 | 25,253 | 29,279 | 23,113 |
| $ Mil | 2004 | 2003 | 2002 |
|---|---|---|---|
| Electric Utilities | 1,421 | 1,424 | 1,296 |
| All Other | 112 | 50 | 23 |
| Total | 1,533 | 1,474 | 1,319 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Traditional Electric Operating Companies | 4,582 | 4,145 | 3,637 | 3,318 | 1,981 |
| Southern Company Gas | 732 | 740 | 615 | 572 | 539 |
| Southern Power | 125 | 328 | 357 | 354 | 266 |
| Electric Utilities-Eliminations | 0 | 0 | 0 | 0 | 0 |
| Eliminations | -7 | -27 | 2 | -9 | -9 |
| All Other | -1,091 | -785 | -635 | -711 | -384 |
| Total | 4,341 | 4,401 | 3,976 | 3,524 | 2,393 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Traditional Electric Operating Companies | 114,287 | 105,577 | 100,429 | 95,861 | 89,051 |
| Southern Company Gas | 27,387 | 26,177 | 25,083 | 24,621 | 23,560 |
| Southern Power | 12,657 | 12,653 | 12,761 | 13,081 | 13,390 |
| All Other | 2,829 | 2,371 | 2,446 | 2,665 | 2,975 |
| Eliminations | -525 | -573 | -843 | -678 | -775 |
| Electric Utilities-Eliminations | -915 | -1,025 | -545 | -659 | -667 |
| Total | 155,720 | 145,180 | 139,331 | 134,891 | 127,534 |
Price Behavior
| Market Price | $83.45 | |
| Market Cap ($ Bil) | 94.9 | |
| First Trading Date | 12/31/1981 | |
| Distance from 52W High | -14.4% | |
| 50 Days | 200 Days | |
| DMA Price | $89.76 | $91.00 |
| DMA Trend | indeterminate | down |
| Distance from DMA | -7.0% | -8.3% |
| 3M | 1YR | |
| Volatility | 16.2% | 17.3% |
| Downside Capture | 13.73 | -26.91 |
| Upside Capture | -57.83 | -31.98 |
| Correlation (SPY) | -16.4% | -17.2% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.23 | -0.50 | -0.44 | -0.18 | -0.26 | 0.01 |
| Up Beta | -0.15 | -0.59 | -0.37 | -0.22 | -0.20 | 0.02 |
| Down Beta | -0.16 | 0.38 | -0.07 | 0.05 | -0.08 | 0.03 |
| Up Capture | -66% | -78% | -56% | -22% | -17% | 1% |
| Bmk +ve Days | 10 | 21 | 32 | 68 | 138 | 427 |
| Stock +ve Days | 8 | 18 | 31 | 60 | 126 | 392 |
| Down Capture | 51% | -47% | -62% | -21% | -59% | -23% |
| Bmk -ve Days | 11 | 21 | 32 | 59 | 113 | 324 |
| Stock -ve Days | 13 | 24 | 33 | 67 | 124 | 356 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with SO | |
|---|---|---|---|---|
| SO | -8.8% | 17.3% | -0.70 | - |
| Sector ETF (XLU) | -6.6% | 15.3% | -0.65 | 76.2% |
| Equity (SPY) | 16.5% | 13.0% | 0.90 | -17.2% |
| Gold (GLD) | 10.5% | 29.6% | 0.34 | 6.3% |
| Commodities (DBC) | 40.5% | 20.8% | 1.52 | -3.8% |
| Real Estate (VNQ) | 3.2% | 13.6% | -0.02 | 45.5% |
| Bitcoin (BTCUSD) | -24.6% | 44.7% | -0.50 | -11.3% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with SO | |
|---|---|---|---|---|
| SO | 9.4% | 18.7% | 0.37 | - |
| Sector ETF (XLU) | 6.9% | 17.4% | 0.25 | 82.1% |
| Equity (SPY) | 13.5% | 17.2% | 0.60 | 21.1% |
| Gold (GLD) | 18.2% | 18.9% | 0.78 | 15.3% |
| Commodities (DBC) | 10.6% | 19.6% | 0.42 | 5.2% |
| Real Estate (VNQ) | 0.9% | 18.9% | -0.06 | 52.5% |
| Bitcoin (BTCUSD) | 15.3% | 52.4% | 0.46 | 2.8% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with SO | |
|---|---|---|---|---|
| SO | 9.2% | 22.0% | 0.38 | - |
| Sector ETF (XLU) | 8.1% | 19.2% | 0.35 | 87.7% |
| Equity (SPY) | 15.4% | 17.9% | 0.73 | 40.9% |
| Gold (GLD) | 11.8% | 16.4% | 0.59 | 14.5% |
| Commodities (DBC) | 8.3% | 18.1% | 0.37 | 9.3% |
| Real Estate (VNQ) | 4.6% | 20.7% | 0.18 | 61.6% |
| Bitcoin (BTCUSD) | 63.5% | 66.2% | 1.03 | 6.8% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Earnings Returns History
Updated 6/2/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| SUMMARY STATS | |||
| # Positive | 0 | 0 | 0 |
| # Negative | 0 | 0 | 0 |
| Median Positive | |||
| Median Negative | |||
| Max Positive | |||
| Max Negative | |||
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| SUMMARY STATS | |||
| # Positive | 0 | 0 | 0 |
| # Negative | 0 | 0 | 0 |
| Median Positive | |||
| Median Negative | |||
| Max Positive | |||
| Max Negative | |||
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/30/2026 | 10-Q |
| 03/31/2026 | 04/30/2026 | 10-Q |
| 12/31/2025 | 02/19/2026 | 10-K |
| 09/30/2025 | 10/30/2025 | 10-Q |
| 06/30/2025 | 07/31/2025 | 10-Q |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 02/20/2025 | 10-K |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/01/2024 | 10-Q |
| 03/31/2024 | 05/02/2024 | 10-Q |
| 12/31/2023 | 02/15/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/03/2023 | 10-Q |
| 03/31/2023 | 04/27/2023 | 10-Q |
| 12/31/2022 | 02/16/2023 | 10-K |
| 09/30/2022 | 10/27/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/30/2026 | 10-Q |
| 03/31/2026 | 04/30/2026 | 10-Q |
| 12/31/2025 | 02/19/2026 | 10-K |
| 09/30/2025 | 10/30/2025 | 10-Q |
| 06/30/2025 | 07/31/2025 | 10-Q |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 02/20/2025 | 10-K |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/01/2024 | 10-Q |
| 03/31/2024 | 05/02/2024 | 10-Q |
| 12/31/2023 | 02/15/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/03/2023 | 10-Q |
| 03/31/2023 | 04/27/2023 | 10-Q |
| 12/31/2022 | 02/16/2023 | 10-K |
| 09/30/2022 | 10/27/2022 | 10-Q |
| 06/30/2022 | 07/28/2022 | 10-Q |
| 03/31/2022 | 04/28/2022 | 10-Q |
| 12/31/2021 | 02/17/2022 | 10-K |
| 09/30/2021 | 11/04/2021 | 10-Q |
| 06/30/2021 | 07/29/2021 | 10-Q |
| 03/31/2021 | 04/29/2021 | 10-Q |
| 12/31/2020 | 02/18/2021 | 10-K |
| 09/30/2020 | 10/29/2020 | 10-Q |
| 06/30/2020 | 07/30/2020 | 10-Q |
| 03/31/2020 | 04/30/2020 | 10-Q |
| 12/31/2019 | 02/20/2020 | 10-K |
| 09/30/2019 | 10/30/2019 | 10-Q |
Insider Activity
Updated 9/4/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Kim, Matthew M | Comptroller | Direct | Sell | 9042026 | 88.87 | 1,400 | 124,418 | 443,284 | Form |
| 2 | Sena, Peter P Iii | Chairman,President & CEO, SNC | Direct | Sell | 9032026 | 88.59 | 4,266 | 377,925 | 2,386,172 | Form |
| 3 | Kim, Matthew M | Comptroller | Direct | Sell | 9032026 | 88.45 | 100 | 8,845 | 566,040 | Form |
| 4 | Kim, Matthew M | Comptroller | Direct | Sell | 8042026 | 94.28 | 100 | 9,428 | 611,689 | Form |
| 5 | Kim, Matthew M | Comptroller | Direct | Sell | 7022026 | 95.77 | 100 | 9,577 | 630,933 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Kim, Matthew M | Comptroller | Direct | Sell | 9042026 | 88.87 | 1,400 | 124,418 | 443,284 | Form |
| 2 | Sena, Peter P Iii | Chairman,President & CEO, SNC | Direct | Sell | 9032026 | 88.59 | 4,266 | 377,925 | 2,386,172 | Form |
| 3 | Kim, Matthew M | Comptroller | Direct | Sell | 9032026 | 88.45 | 100 | 8,845 | 566,040 | Form |
| 4 | Kim, Matthew M | Comptroller | Direct | Sell | 8042026 | 94.28 | 100 | 9,428 | 611,689 | Form |
| 5 | Kim, Matthew M | Comptroller | Direct | Sell | 7022026 | 95.77 | 100 | 9,577 | 630,933 | Form |
| 6 | Kim, Matthew M | Comptroller | Direct | Sell | 6012026 | 91.16 | 100 | 9,116 | 609,678 | Form |
| 7 | Kim, Matthew M | Comptroller | Direct | Sell | 5042026 | 96.57 | 100 | 9,657 | 655,517 | Form |
| 8 | Greene, Kimberly S, | Chairman, President & CEO, GPC | Direct | Sell | 3312026 | 96.67 | 25,000 | 2,416,750 | 10,015,205 | Form |
| 9 | Cummiskey, Christopher | EVP | Direct | Sell | 3192026 | 96.55 | 6,669 | 643,892 | 2,973,783 | Form |
| 10 | Connally, Stan W | EVP & COO | Direct | Sell | 3192026 | 97.13 | 12,500 | 1,214,125 | 15,684,650 | Form |
| 11 | Kim, Matthew M | Comptroller | Direct | Sell | 2252026 | 95.15 | 5,123 | 487,453 | 655,393 | Form |
| 12 | Anderson, Bryan D | EVP | Direct | Sell | 10012025 | 93.83 | 6,206 | 582,309 | 4,828,023 | Form |
Investor Activity (13F)
Updated Sep 30, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
SO Trade Sentinel
Constructive
CONVICTION RATIONALE
Conviction is constructive, centered on a generational, contracted demand boom. The company has secured over 17 GW in long-term agreements, providing high visibility into future growth. This is balanced by the significant execution and financing risks of its $81 billion capital plan, which requires diligent monitoring of project milestones and regulatory outcomes.
STOCK ARCHETYPE
Regulated Utility & Contracted InfrastructureFor regulated utilities: (Approved Rate Base x Allowed Rate of Return). For wholesale power: (Contracted Capacity in MW x PPA Price). The key driver for the company is the growth of its regulated rate base through capital expenditures. The successful and timely build-out of new generation capacity to serve the contracted 17+ GW of new large-load demand, which directly expands the regulated rate base and drives long-term, predictable earnings growth.
INVESTMENT THESIS
Evidence suggests yes. Southern is capturing a historic surge in data center power demand with highly-structured, long-term contracts.
- Contracted large load agreements now exceed 17 GW.
- An additional 8 GW of projects are in late-stage negotiations.
- New contracts cover at least 100% of incremental service costs.
- Year-to-date data center electricity usage is up 49%.
- Management projects 2026 EPS near the top of its $4.50-$4.60 range.
PRIMARY RISK
The massive capital program creates significant risk. Trailing free cash flow is negative $3.3 billion, and net debt is 5 times EBITDA.
- The 5-year capital investment forecast is $81 billion.
- Free cash flow was negative $3.3 billion over the last twelve months.
- Interest coverage is low at 2.6 times.
- Operating expenses grew 9.4% TTM, outpacing 6.4% revenue growth.
- The company sourced $700 million in equity via its ATM program in Q2.
| KPI | Status | Rationale |
|---|---|---|
| Contracted Large Load (GW) | Over 17 GW by the mid-2030s, as of the Q2 2026 earnings call. - Accelerating | The company is experiencing a dramatic and accelerating pace of securing long-term contracts for future electricity demand, primarily from data centers. Management noted that in addition to the 17 GW contracted, there are another 8 GW of projects in late stages and a prospective pipeline of over 75 GW, suggesting a strong runway for continued growth. |
| Weather-Normal Commercial Sales Growth | 7.4% year-over-year growth in Q2 2026. - Accelerating | The growth in commercial electricity sales, which includes data centers, is accelerating, confirming that the contracted load is beginning to translate into actual energy consumption. Management specified that data center usage itself was up 55% year-over-year in the second quarter, highlighting it as the primary driver of the segment's strength. |
| Contracted Large Load Agreements | Over 17 GW (As of July 2026) | This metric indicates the magnitude of future electricity demand that has been secured under long-term contracts, primarily from data centers. It is the primary driver of the company's capital expenditure plan and future rate base growth. |
| Prospective Large Load Pipeline | Well above 75 GW (As of July 2026) | Represents the total potential future demand from large industrial and data center projects that the company is tracking. The conversion rate of this pipeline into contracted agreements signals the runway for future growth beyond what is already secured. |
| Data Center Usage Growth (YTD) | 49% (First half of 2026 vs first half of 2025) | Directly measures the increase in electricity consumption from data centers, a key component of the large-load growth story. Rapid acceleration validates the need for new generation capacity. |
Contracted Growth vs. Construction Cost
BULL VIEW
The 17+ GW of contracted, de-risked demand provides a visible, multi-year growth runway that will expand the rate base and drive earnings, justifying the near-term financial strain.
CORE TENSION
Can the accelerating 17 GW contract backlog outweigh the financial pressures of negative free cash flow, which prompted a -2.0% post-earnings stock reaction?
PREVAILING SENTIMENT
The latest evidence favors the bull view. The company delivered on its promise to sign 6 GW of new contracts in Q2, a powerful leading indicator of future growth.
BEAR VIEW
The negative $3.3 billion free cash flow and 5x leverage show the immense cost of this growth. Any construction misstep or regulatory friction could make the returns fall short of the capital cost.
| Timeline | Event & Metric To Watch |
|---|---|
by the end of 2026 | Illinois Natural Gas Regulation Watch: The final report from the Illinois Commission and its recommendations regarding the gas distribution system. |
by the fourth quarter 2026 | Harris Dam Relicensing Watch: A new long-term license for the Harris Dam hydroelectric project is expected to be issued. |
by the end of 2026 | Illinois Gas Future Report Watch: The Illinois Commission is expected to issue its final report on the "future of natural gas" proceedings. |
September 30, 2026 | Nicor Gas Court Ruling Watch: The court's decision on whether to hear the appeal regarding capital structure and cost disallowances. |
September 30, 2026 | Nicor Gas Court Ruling Watch: The Illinois Supreme Court is expected to rule on a petition for leave to appeal filed by Nicor Gas. |
10/29/2026, 11/5/2026 | Peer Demand and Cost Commentary Watch: Commentary from D or DUK on data center load ramps, construction costs, or regulatory pushback. |
11/5/2026 | Peer Duke Energy Earnings Watch: Peer Duke Energy (DUK) is scheduled to report earnings. |
December 31, 2026 | Rocky Mountain License Expiration Watch: The license for the Rocky Mountain pumped storage facility, co-owned by Georgia Power, expires. |
in the coming quarters | Plant Yates Turbines Completion Watch: Three new combustion turbines at Plant Yates are advancing towards completion. |
No set date | Failure to Finalize Contracts Watch: Company announcements of new, signed large-load customer contracts. |
| Date | Event | Stock Impact |
|---|---|---|
2026-09-15 | Robins Battery Facility Operational Details: Georgia Power celebrated the commercial operation of the 128-megawatt Robins Battery Facility, a battery energy storage system located near Warner Robins, Ga. | -1.2% $87.00 -> $85.95 |
2026-09-10 | Georgia Power Solar PPAs Approved Details: Georgia Power received approval from the Georgia PSC for 1,137 megawatts of new solar power purchase agreements through its CARES program. | -1.3% $88.34 -> $87.17 |
2026-08-26 | OpenAI Contract Approved Details: Georgia Power announced its contract to serve OpenAI's new project in Effingham County was approved by the Georgia Public Service Commission. | -1.0% $89.97 -> $89.05 |
2026-08-03 | Company Prices Convertible Notes Details: Southern Company announced the pricing of upsized convertible senior notes offerings of $725 million due 2027 and $1.65 billion due 2029. | -1.4% $93.77 -> $92.49 |
2026-07-30 | Negative Q2 Earnings Reaction Details: Following its Q2 2026 earnings report, the stock had a two-day reaction of -2.0% versus 2.0% for the S&P 500. Management announced 6 GW of new contracted load. | -1.6% $95.26 -> $93.77 |
2026-06-25 | Georgia Power Expands Solar Programs Details: Georgia Power opened enrollment for new Customer Identified Resource programs, expanding options for commercial and industrial customers to connect to solar energy. | +1.4% $95.00 -> $96.36 |
2026-04-30 | Positive Q1 Earnings Reaction Details: The company reported Q1 2026 earnings, after which the stock had a two-day reaction of 3.0% versus 1.0% for the S&P 500. | +3.4% $91.98 -> $95.13 |
2026-03-24 | Georgia Power Awards Solar Contracts Details: Georgia Power awarded final contracts for its largest distributed generation solar procurement, adding more than 110 megawatts of new solar generation. | +0.9% $92.22 -> $93.06 |
Position Sizing
5% - 7%
NORMAL POSITION
Sizing is volatility-based: SO trades at roughly 18% annualized options-implied volatility versus about 13% for the S&P 500 (1.3x the market), around the 38th percentile of its own trailing year. A 5% - 7% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
DUK - Duke Energy
Peer-Comparable ExposureDuke Energy offers similar exposure to the Southeast data center boom and has slightly better trailing operating margins at 26.6% versus Southern's 24.2%.
NEE - NextEra Energy
Higher-Margin AlternativeNextEra Energy has a significantly higher gross margin of 61% and operating margin of 28.3%, suggesting a more efficient cost structure.
Southern Company is a regulated utility transforming into a growth infrastructure play, capitalizing on a generational surge in power demand from data centers by locking in long-term, protected contracts that fund a massive expansion of its core rate base.
The investment thesis centers on the company's unique position in the fast-growing Southeast, which is attracting massive data center investments. Southern is capturing this demand through long-term, de-risked contracts that justify a multi-billion dollar capital investment program. This program is set to significantly expand the company's regulated asset base, driving predictable earnings growth for the foreseeable future while providing rate stability for existing customers.
Announcements of new, large-scale, long-term contracts with data centers or other large-load customers. On-time and on-budget completion of new generation and transmission projects. Constructive regulatory outcomes that approve new projects and cost recovery.
A significant slowdown in the large-load contract pipeline, major construction delays or cost overruns on new power plants, or adverse regulatory decisions that disallow cost recovery for new investments.
Short-term fluctuations in weather impacting quarterly sales, minor movements in commodity prices for fuel, or general market commentary on the utility sector not specific to Southern's large-load growth execution.
Repricing Catalyst
The continued conversion of its 75+ GW large-load pipeline into firm, long-term contracts. Each new contract, like the recently announced 3.2 GW deal with OpenAI, de-risks the future growth trajectory and provides justification for further expansion of the capital investment plan.
Traditional Electric Operating Companies
$22.1B TTM (75% of Total)What It Is
This segment consists of three vertically integrated utilities (Alabama Power, Georgia Power, and Mississippi Power) that generate, transmit, and distribute electricity to retail customers (residential, commercial, industrial) and wholesale customers within their service territories in Alabama, Georgia, and southeastern Mississippi.
Who Pays & How
Retail and wholesale customers within the service territories of Alabama Power, Georgia Power, and Mississippi Power pay for electricity. As regulated monopolies, these companies are the sole providers in their assigned areas, and customers pay for essential, reliable electric service.
Competition
Southern Company Gas
$5.0B TTM (17% of Total)What It Is
This segment distributes natural gas to approximately 4.4 million residential, commercial, and industrial customers in Illinois, Georgia, Virginia, and Tennessee. It also holds investments in natural gas pipelines and provides gas marketing services.
Who Pays & How
Residential, commercial, and industrial customers in its four-state service area pay for natural gas distribution. They pay for a reliable supply of natural gas for heating and other uses, with rates and services overseen by state regulators.
Competition
Southern Power
$2.2B TTM (7% of Total)What It Is
This segment develops, constructs, acquires, owns, and manages power generation assets (including natural gas, solar, and wind) and sells electricity at market-based rates in the wholesale market. Customers are primarily investor-owned utilities, municipalities, electric cooperatives, and other load-serving entities.
Who Pays & How
Wholesale electricity purchasers, such as utilities and cooperatives, pay for generating capacity and energy to serve their own end-customers. They contract with Southern Power to secure long-term, reliable power supply.
Competition
Southern — Investor Video Playlist
Industry Resources
| Utilities Resources |
| Data.gov Energy Infrastructure |
| Data.gov Energy Resources |
| Utility Dive |
| Electric Utilities Resources |
| T&D World |
| Edison Electric Institute (EEI) |
| Smart Energy International |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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