August 01, 2025 a 03:31 am
SO: Dividend Analysis - The Southern Company
The Southern Company represents a solid choice for dividend investors. With a history of steady dividend growth over the past 44 years and no recent cuts, it reflects strong corporate stability. Investors can appreciate its generous dividend yield and the ongoing potential for income generation.
📊 Overview
In this section, we thoroughly examine the key dividend metrics of The Southern Company, providing investors with a clear picture of what to expect in terms of income and reliability.
| Metric | Value |
|---|---|
| Sector | Utilities |
| Dividend yield | 3.09 % |
| Current dividend per share | 2.70 USD |
| Dividend history | 44 years |
| Last cut or suspension | None |
🏛️ Dividend History
A strong dividend history can indicate a company's commitment to returning value to shareholders. The Southern Company has consistently increased its dividends over the decades.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 2.20 |
| 2024 | 2.86 |
| 2023 | 2.78 |
| 2022 | 2.70 |
| 2021 | 2.62 |
📈 Dividend Growth
Dividend growth is a critical factor for assessing the future performance and inflation protection of dividend income. The Southern Company has shown modest yet consistent growth in its dividend payouts.
| Time | Growth |
|---|---|
| 3 years | 2.96 % |
| 5 years | 3.06 % |
The average dividend growth is 3.06 % over 5 years. This shows moderate but steady dividend growth.
💸 Payout Ratio
The payout ratio is crucial for assessing the sustainability of dividend payments. With an EPS-based payout ratio of 69.28 % and an FCF-based ratio of 99.27 %, The Southern Company maintains a relatively high payout ratio.
| Key figure | Ratio |
|---|---|
| EPS-based | 69.28 % |
| Free cash flow-based | 99.27 % |
A high payout ratio could indicate limited reinvestment of earnings back into the business, though utility companies often sustain higher payouts given their steady cash flows.
💼 Cashflow & Capital Efficiency
Cashflow and capital efficiency are vital for understanding how well a company can cover its operations and invest for future growth. Here, we'll evaluate the consistency and returns on capital.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 0.92 % | -2.01 % | -2.11 % |
| Earnings Yield | 4.88 % | 5.19 % | 4.60 % |
| CAPEX to Operating Cash Flow | 91.49 % | 120.42 % | 125.72 % |
| Stock-based Compensation to Revenue | 0.49 % | 0.54 % | 0.43 % |
| Free Cash Flow / Operating Cash Flow Ratio | 8.51 % | -20.41 % | -25.72 % |
While earnings yield is stable, negative free cash flow yield requires attention, reflecting possibly high reinvestment or operational challenges.
🔍 Balance Sheet & Leverage Analysis
Solidity in the balance sheet ensures the company's long-term viability, handling obligations and optimizing capital structure.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 199.58 % | 201.91 % | 194.47 % |
| Debt-to-Assets | 45.65 % | 45.57 % | 43.84 % |
| Debt-to-Capital | 66.62 % | 66.88 % | 66.04 % |
| Net Debt to EBITDA | 4.94 | 5.34 | 5.74 |
| Current Ratio | 0.67 | 0.77 | 0.66 |
| Quick Ratio | 0.46 | 0.53 | 0.49 |
| Financial Leverage | 4.37 | 4.43 | 4.44 |
Debt levels are fairly stable but notably high, which is typical for utility companies in capital-intensive industries.
📊 Fundamental Strength & Profitability
Analyzing fundamental strength and profitability helps to understand how efficiently the company uses its resources to generate profits.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 13.25 % | 12.64 % | 11.63 % |
| Return on Assets | 3.03 % | 2.85 % | 2.62 % |
| Margins: Net | 16.47 % | 15.75 % | 12.07 % |
| EBIT | 29.83 % | 26.85 % | 20.19 % |
| EBITDA | 49.39 % | 46.51 % | 34.05 % |
| Gross | 49.93 % | 46.36 % | 36.96 % |
| Research & Development to Revenue | 0 % | 0 % | 0 % |
The Southern Company demonstrates solid profitability, but its lack of R&D investment reflects its mature market position typical for utilities.
📉 Price Development
📋 Dividend Scoring System
| Criteria | Score | Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Overall Score: 30/40
🏆 Rating
The Southern Company presents an appealing option for income-focused investors, offering a stable and consistent dividend profile. Despite modest dividend growth and high payout ratios, its established market presence and reliable cash flows make it a dependable choice in the utilities sector.