MeritValue

SOUTHERN CO

SOdata completeness 100%19 fiscal years on file

Data notes: no data for concept 'interestExpense'

The thesis, from the filings

SOUTHERN CO earns about 11% on invested capital, but has diluted owners by 4% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $37.15 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$23.5B1$25.9B2$24.8B3$26.8B3$28.9B3
Net income$2.31B4$3.43B5$3.98B6$4.4B6$4.34B6
Operating cash flow$6.17B7$6.3B8$7.55B9$9.79B9$9.8B9
Capital expenditure$7.59B10$7.92B11$9.1B12$8.96B12$12.7B12
Free cash flow (derived)−$1.42B7−$1.62B8−$1.54B9$833M9−$2.94B9
Total debt$1.44B13$2.61B14$2.31B15$1.34B16$722M16
Cash & equivalents$1.8B17$1.92B18$748M19$1.07B20$1.64B20
Diluted shares1.07B1.08B1.10B1.10B1.11B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$324.76
your share of equity
Profit it earned you last year
$39.14
Free cash flow it threw off
−$26.47
Debt you’d be carrying
$6.51

10 shares is a claim on $324.76 of net worth that earned you $39.14 and generated −$26.47 of cash last year, against $6.51 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
11% avg · 5y
FY21 8%FY22 11%FY23 12%FY24 13%FY25 12%

It earned an average 11% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+4% shares · 5y

Share count is up 4% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 50% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$37.15
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$3.98B
  • growthAssumed0.0%
Graham Number
$53.52
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000092122-24-000009 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000092122-25-000018 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000092122-26-000006 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000092122-24-000009 (ProfitLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000092122-25-000018 (ProfitLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000092122-26-000006 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000092122-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000092122-25-000018 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000092122-26-000006 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000092122-24-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000092122-25-000018 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000092122-26-000006 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000092122-23-000012 (ShortTermBorrowings)
  14. 10-K · period ending 2022-12-31 · accession 0000092122-24-000009 (ShortTermBorrowings)
  15. 10-K · period ending 2023-12-31 · accession 0000092122-25-000018 (ShortTermBorrowings)
  16. 10-K · period ending 2024-12-31 · accession 0000092122-26-000006 (ShortTermBorrowings)
  17. 10-K · period ending 2021-12-31 · accession 0000092122-23-000012 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000092122-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000092122-25-000018 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0000092122-26-000006 (CashAndCashEquivalentsAtCarryingValue)