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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 the most recent trading day at $49.24, moving +0.24% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.07%. Elsewhere, the Dow lost 0.21%, while the tech-heavy Nasdaq added 0.13%.

Prior to today's trading, shares of the power company had gained 6% over the past month. This has outpaced the Utilities sector's gain of 4.61% and the S&P 500's gain of 5.36% in that time.

SO will be looking to display strength as it nears its next earnings release, which is expected to be February 20, 2019. The company is expected to report EPS of $0.24, down 52.94% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.92 billion, down 12.62% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for SO. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SO is currently a Zacks Rank #2 (Buy).

Looking at its valuation, SO is holding a Forward P/E ratio of 16.32. This valuation marks a discount compared to its industry's average Forward P/E of 18.5.

Meanwhile, SO's PEG ratio is currently 3.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Utility - Electric Power stocks are, on average, holding a PEG ratio of 3.31 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 73, putting it in the top 29% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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