Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 3.72%, lower than industry average of 4.31%.

Growth Trajectory

Profitability

In the growth phase company makes 28.74% profit on every dollar of sales, higher than industry average of 14.97%.

Profitability Trajectory

Risk Profile

Investors expect at least 5.35% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
104.76B USD
Equity Value
31.74B USD
FCF Yield
67.80%
Average ROIC
7.39%
Cost of Capital
6.61%
P/E Ratio
14.77x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues28.36B USD26.72B USD
Operating Income or EBIT8.40B USD8.21B USD
Interest Expense2.97B USD2.74B USD
Book Value Of Equity34.01B USD33.21B USD
Book Value Of Debt70.82B USD66.28B USD
Cash and Marketable Securities1.26B USD1.07B USD
Number of Shares Outstanding1.10B--
Minority interests3.47B USD0 USD
Current Stock Price91.39 USD--
Effective Tax Rate19.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
+1.82%
6.13%Company
vs
4.31%Industry
Above Industry
Operating Margin
+14.65%
29.61%Company
vs
14.97%Industry
Above Industry
The Southern Company demonstrates superior performance in both growth and profitability compared to industry peers, indicating strong competitive advantages and operational excellence.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 55% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 57.10B USD Add
Present Value (Cash Flow Over Next 10 Years) 47.66B USD Add
Value of Operating Assets 104.76B USD Sub-total
Debt 70.82B USD Subtract
Minority Interests 3.46B USD Subtract
Cash 1.26B USD Add
Value of Equity 31.74B USD Sub-total
Number of Shares 1.10B shares Divisor
Estimated Value per Share (Fair Value) 28.85 USD Total
Current Market Price 91.38 USD Reference

Financial Projections

Total FCF Present Value
47.66B USD
Avg Revenue Growth
3.80%
Avg Operating Margin
28.54%
Avg ROIC
7.39%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue29.76B USD30.87B USD32.02B USD33.21B USD34.45B USD35.79B USD37.25B USD38.83B USD40.55B USD42.41B USD44.37B USD
Growth Rate 4.95% 3.72% 3.72% 3.72% 3.72% 3.89% 4.07% 4.24% 4.42% 4.59% 4.59%
PROFITABILITY
Operating Income8.81B USD8.96B USD9.20B USD9.44B USD9.69B USD10.07B USD10.48B USD10.93B USD11.41B USD11.94B USD12.48B USD
Operating Margin 29.61% 29.03% 28.73% 28.44% 28.14% 28.14% 28.14% 28.14% 28.14% 28.14% 28.14%
EBIT (1-tax)7.14B USD7.26B USD7.45B USD7.65B USD7.85B USD8.04B USD8.24B USD8.46B USD8.69B USD8.95B USD9.36B USD
CASH FLOW
Reinvestment768.95M USD797.57M USD827.25M USD858.04M USD931.98M USD2.02B USD2.19B USD2.38B USD2.58B USD2.70B USD4.87B USD
Free Cash Flow6.37B USD6.46B USD6.62B USD6.79B USD6.92B USD6.01B USD6.04B USD6.07B USD6.10B USD6.24B USD4.48B USD
Terminal Value--------------------106.08B USD
Present Value6.04B USD5.82B USD5.66B USD5.51B USD5.33B USD4.37B USD4.11B USD3.84B USD3.57B USD3.36B USD—
EFFICIENCY
ROIC 6.89% 6.95% 7.08% 7.22% 7.35% 7.46% 7.50% 7.55% 7.60% 7.65% 8.83%
Cost of Capital 5.35% 5.35% 5.35% 5.35% 5.35% 6.04% 6.74% 7.43% 8.13% 8.83% 8.83%
Sales/Capital 1.44x 1.44x 1.44x 1.44x 1.44x 0.72x 0.72x 0.72x 0.72x 0.72x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)