Zacks Investment Research Upgrades Southern Co. (SO) to “Buy”
Southern Co. (NYSE:SO) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Tuesday. The brokerage presently has a $60.00 price target on the stock. Zacks Investment Research’s price objective suggests a potential upside of 13.85% from the company’s previous close.
According to Zacks, “Despite a decline in electric sales, Southern company has maintained its excellent track record of earnings surprise history, beating estimates in each of the last four quarters. One of the largest and best-managed electric utility holding companies in the U.S., SO dominates the power business across the southeastern region. With good rate base growth and constructive regulation, we expect it to generate steady earnings and dividend growth in the coming years through its long term power contracts. Additionally, the utility's $12 billion acquisition of AGL Resources has significantly increased its customer base and is expected to help generate more revenues. Sporting a low beta – translating into less volatility – and a reasonable valuation, we see Southern Company as an attractive investment.”
A number of other equities research analysts also recently weighed in on SO. Jefferies Group reissued a “hold” rating on shares of Southern in a research report on Monday, July 11th. Argus reissued a “buy” rating on shares of Southern in a research report on Wednesday, June 15th. Mizuho restated a “hold” rating and set a $50.00 price target on shares of Southern in a research note on Monday, July 11th. Goldman Sachs Group Inc. restated a “neutral” rating and set a $54.00 price target on shares of Southern in a research note on Thursday, July 14th. Finally, Barclays PLC upgraded shares of Southern from an “equal weight” rating to an “overweight” rating and raised their price target for the stock from $54.00 to $62.00 in a research note on Thursday, July 14th. They noted that the move was a valuation call. Two equities research analysts have rated the stock with a sell rating, nine have given a hold rating and three have issued a buy rating to the stock. The stock presently has an average rating of “Hold” and a consensus price target of $53.50.
Southern (NYSE:SO) opened at 52.70 on Tuesday. Southern has a one year low of $43.38 and a one year high of $54.64. The company has a market capitalization of $49.62 billion, a price-to-earnings ratio of 20.92 and a beta of 0.05. The company has a 50-day moving average price of $52.00 and a 200-day moving average price of $51.41.
Southern (NYSE:SO) last released its earnings results on Wednesday, July 27th. The company reported $0.74 earnings per share for the quarter, topping analysts’ consensus estimates of $0.70 by $0.04. Southern had a return on equity of 12.50% and a net margin of 13.77%. The business had revenue of $4.45 billion for the quarter, compared to the consensus estimate of $4.54 billion. During the same period last year, the business earned $0.71 earnings per share. The firm’s revenue for the quarter was up 2.7% compared to the same quarter last year. Equities research analysts anticipate that Southern will post $2.86 EPS for the current year.
The business also recently declared a quarterly dividend, which was paid on Tuesday, September 6th. Investors of record on Monday, August 15th were issued a $0.56 dividend. This represents a $2.24 dividend on an annualized basis and a dividend yield of 4.25%. The ex-dividend date was Thursday, August 11th. Southern’s dividend payout ratio is currently 87.50%.
In related news, CFO Art P. Beattie sold 123,207 shares of the firm’s stock in a transaction that occurred on Tuesday, July 5th. The shares were sold at an average price of $54.12, for a total value of $6,667,962.84. Following the completion of the sale, the chief financial officer now owns 75,141 shares of the company’s stock, valued at $4,066,630.92. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CEO Mark A. Crosswhite sold 167,273 shares of the firm’s stock in a transaction that occurred on Thursday, July 28th. The shares were sold at an average price of $53.30, for a total transaction of $8,915,650.90. Following the completion of the sale, the chief executive officer now directly owns 171,983 shares of the company’s stock, valued at approximately $9,166,693.90. The disclosure for this sale can be found here. 1.00% of the stock is currently owned by corporate insiders.
Several hedge funds have recently modified their holdings of SO. Vanguard Group Inc. raised its stake in Southern by 5.6% in the second quarter. Vanguard Group Inc. now owns 60,379,260 shares of the company’s stock worth $3,238,139,000 after buying an additional 3,222,084 shares in the last quarter. State Street Corp raised its stake in Southern by 1.9% in the second quarter. State Street Corp now owns 46,544,013 shares of the company’s stock worth $2,496,153,000 after buying an additional 858,466 shares in the last quarter. BlackRock Institutional Trust Company N.A. raised its stake in Southern by 3.0% in the second quarter. BlackRock Institutional Trust Company N.A. now owns 25,650,940 shares of the company’s stock worth $1,375,660,000 after buying an additional 749,727 shares in the last quarter. BlackRock Fund Advisors raised its stake in Southern by 13.0% in the second quarter. BlackRock Fund Advisors now owns 19,032,403 shares of the company’s stock worth $1,020,708,000 after buying an additional 2,194,490 shares in the last quarter. Finally, Bank of New York Mellon Corp raised its stake in Southern by 0.5% in the second quarter. Bank of New York Mellon Corp now owns 10,577,864 shares of the company’s stock worth $567,291,000 after buying an additional 57,511 shares in the last quarter. 48.64% of the stock is owned by institutional investors and hedge funds.
The Southern Company (Southern Company) is a holding company. The Company owns all of the stock of the traditional operating companies and Southern Power Company (Southern Power), and owns other direct and indirect subsidiaries. Southern Company’s segments include the sale of electricity by four traditional operating companies, Southern Power and All Other.
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