Start here if you're new
what it is
Southern sells electricity and gas to homes and businesses across the Southeast and parts of the Midwest.
how it gets paid
Last year Southern made $29.6B in revenue. Residential electric was the main engine at $12.7B, or 43% of sales.
why it's growing
Revenue grew 10.6% last year. Data center demand remained a notable contributor, with usage growth outpacing broader system averages.
what just happened
Southern posted quarterly EPS of $0.55, right in line with estimates, while full-year revenue reached $29.6 billion.
At a glance
A balance sheet — strong enough to weather a downturn
90/100 earnings predictability — you can trust these numbers
20.5x trailing p/e — priced about right
6.5% return on capital — nothing to write home about
xvary composite: 70/100 — average
What they do
Southern sells electricity and gas to homes and businesses across the Southeast and parts of the Midwest.
Your utility bill is sticky because you usually do not choose a second set of wires or pipes. Southern serves 4.4 million electric customers and another 4.4 million gas customers, which gives it a built-in audience most businesses would kill for. Regulated utility model → state-approved service areas and returns → so what: you get demand that stays put, even when the economy does not.
How they make money
$29.6B
annual revenue · their business grew +10.6% last year
Residential electric
$12.7B
Commercial electric
$10.4B
Industrial electric
$6.2B
Other electric
$0.3B
The products that matter
generates and delivers electricity
regulated electric utility
$29.6B revenue · 4.4M customers
it's the whole story. this utility platform produced $29.6B in revenue last year, serving 4.4 million customers, and growth reached 10.6% from a year ago.
core
earns allowed returns on capital
regulated rate base
14% roe · A balance sheet
regulated utilities do not win with flashy margins. they win by investing capital and earning approved returns. here, return on equity is 14%, which helps explain why the market treats SO like a bond with some growth attached.
income engine
incremental load growth driver
large-load demand
5–7% EPS growth target
management keeps pointing to data center and other large-load demand as support for its 5–7% annual earnings growth target. that is the part of the story with upside, and also the part that still needs proving quarter by quarter.
watch closely
Key numbers
$85
18-month target
The central target sits below today's $88.16 price. Plain English: you are paying up for steadiness, not for obvious upside.
$64.6B
long-term debt
That debt load equals 38% of capital, which tells you this utility's expansion plan is being carried by a very large balance sheet.
20.5x
trailing p/e
Price-to-earnings ratio → how much investors pay for each dollar of profit → so what: Southern trades like a premium bond with a stock ticker.
24.7%
operating margin
Operating margin → profit after running the business, before interest and taxes → so what: the core utility throws off solid earnings before financing costs.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 1 — safer than 95% of stocks
- price stability 100 / 100
- long-term debt $64.6B (38% of capital)
- return on equity 14% — $0.14 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in SO 3 years ago → it's now worth $14,550.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Southern posted quarterly EPS of $0.55, right in line with estimates, while full-year revenue reached $29.6 billion.
The latest quarter was more about cost pressure than demand. Annual revenue rose 10.6%, but quarter-to-quarter profit still looked soft as expenses climbed.
$29.6B
annual revenue
$0.55
quarterly eps
24.7%
operating margin
the number that mattered
$0.55 mattered because it matched estimates exactly, which means investors now care more about the 2026 growth path than the quarter itself.
-
management reaffirmed its full-year outlook and continues to target 5%–7% annual earnings growth.data center demand remained a notable contributor, with usage growth outpacing broader system averages.
-
long-term growth visibility remains strong.southern outlined accelerating large-load contract activity, with data center demand emerging as a major driver of future electric sales growth.
-
capital investment plans remain substantial, focused on grid modernization, renewable expansion, and infrastructure upgrades across the southeast.
-
financing execution has progressed smoothly, with a large portion of equity needs already addressed.management also highlighted flexibility in contract structures designed to ensure cost recovery and protect existing customers.
-
shares have held near record levels, reflecting confidence in execution and regulatory visibility.with valuation elevated, further gains are likely to be tied to incremental load conversion, regulatory clarity, and capital deployment rather than multiple expansion. near-term performance may also reflect evolving regulatory dynamics following recent state-level political changes.
source: company earnings report, 2026
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What could go wrong
the #1 risk is regulatory and legal action tied to Alabama Power. for a regulated utility, the real danger is not demand disappearing. it's regulators or courts making cost recovery harder.
med
alabama power legal and regulatory action
a subsidiary faces a lawsuit and possible enforcement action. that is a direct threat to the clean, predictable narrative utility investors usually pay for.
the disclosure here points to $4.4B–$7.4B in revenue exposure. if recovery terms get worse, the hit lands on growth and sentiment at the same time.
med
ferc rehearing uncertainty
a Federal Energy Regulatory Commission rehearing request adds another layer of uncertainty around allowed economics. utilities live and die by these rulings, even when the headlines look procedural.
the current page data suggests a potential 2–5% margin effect. that would matter in a business posting a 14.7% quarterly margin and targeting mid-single-digit EPS growth.
med
capital plan execution
Southern is still spending heavily on grid modernization, renewables, and infrastructure. with $64.6B of long-term debt already on the balance sheet, financing discipline matters more than usual.
if spending rises faster than regulators allow returns or if funding gets less favorable, the 5–7% annual EPS growth target starts looking optimistic rather than routine.
these risks all point to the same pressure point: the stock is priced for a calm 5–7% earnings path. if legal, regulatory, or financing friction interrupts that path, the current $88 price has less room for error than the safety profile suggests.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
alabama power case developments
you want cleaner headlines here. this is the fastest way a low-drama utility story turns into a political one.
calendar
next update on the 5–7% growth plan
every quarter is a check on whether management still sounds confident about that earnings path.
metric
large-load demand conversion
data center demand is the exciting part of the story. watch whether it becomes reported revenue and earnings, not just a talking point.
trend
valuation versus target range
with the stock at $88 and the 3–5 year midpoint target at $85, you need execution to outrun valuation gravity.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts do not see this as a near-term outperformer from here.
risk profile
safest 5%
stability score 1 means lower drawdown risk than most stocks. you own this for sleep, not fireworks.
chart momentum
average
technical score 3 means the chart is not sending a dramatic signal. welcome to utility investing.
earnings predictability
90 / 100
few big surprises. if you care about consistency more than upside torque, this is the number to keep in mind.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 1,071 buyers vs. 805 sellers in 3q2025. total institutional holdings: 0.8B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$71
$98
$88
current price
$85
target midpoint · 4% from current · 3-5yr high: $110 (+25% · 9% ann'l return)
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