Southern (SO) Cut to Hold at Zacks Investment Research
Zacks Investment Research downgraded shares of Southern (NYSE:SO) from a buy rating to a hold rating in a research note issued to investors on Thursday.
According to Zacks, “Southern Company is one of the largest and best-managed electric utility holding companies in the United States, dominating the power business across the southeastern region. With good rate base growth and constructive regulation, it is expected to generate steady earnings and dividend growth in the coming years through long-term power contracts. Additionally, SO's $12 billion AGL Resources buy has significantly increased its customer base and diversified offerings. However, continued timing and cost overrun issues over two large construction projects – Vogtle and Kemper – are major overhangs. While the $25 billion Vogtle nuclear plant has gone well over budget and is years behind schedule, Southern's Kemper project suffered yet another setback with the suspension of all coal gasification operations amid additional cost burden. Hence, Southern Company warrants a cautious stance from the investors. “
Other analysts have also issued research reports about the company. Credit Suisse Group upped their target price on Southern from $44.00 to $46.00 and gave the company an underperform rating in a report on Thursday. Scotiabank reaffirmed a hold rating and set a $44.00 price objective on shares of Southern in a research note on Thursday, August 9th. Bank of America decreased their price objective on Southern from $47.00 to $46.00 and set an underperform rating on the stock in a research note on Wednesday, August 22nd. Guggenheim lowered Southern from a buy rating to a neutral rating and decreased their price objective for the company from $50.00 to $47.00 in a research note on Wednesday, August 8th. Finally, UBS Group increased their price objective on Southern from $46.00 to $47.00 and gave the company a neutral rating in a research note on Monday, October 29th. Six investment analysts have rated the stock with a sell rating, eleven have given a hold rating and one has assigned a buy rating to the stock. The stock presently has a consensus rating of Hold and an average target price of $46.54.
Southern (NYSE:SO) last posted its earnings results on Wednesday, November 7th. The utilities provider reported $1.14 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.07 by $0.07. The company had revenue of $6.70 billion for the quarter, compared to analyst estimates of $6.68 billion. Southern had a return on equity of 12.88% and a net margin of 10.35%. Southern’s revenue was up 8.0% compared to the same quarter last year. During the same quarter in the prior year, the company earned $1.12 earnings per share. As a group, sell-side analysts forecast that Southern will post 3.03 EPS for the current fiscal year.
The business also recently disclosed a quarterly dividend, which was paid on Thursday, December 6th. Investors of record on Monday, November 19th were paid a dividend of $0.60 per share. This represents a $2.40 dividend on an annualized basis and a dividend yield of 5.06%. The ex-dividend date was Friday, November 16th. Southern’s payout ratio is currently 79.47%.
In related news, CEO Kimberly S. Greene sold 15,000 shares of the stock in a transaction dated Monday, December 3rd. The stock was sold at an average price of $47.03, for a total transaction of $705,450.00. Following the transaction, the chief executive officer now directly owns 9,380 shares in the company, valued at $441,141.40. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Mark Lantrip sold 9,000 shares of the stock in a transaction dated Tuesday, December 4th. The stock was sold at an average price of $47.58, for a total value of $428,220.00. The disclosure for this sale can be found here. Corporate insiders own 0.73% of the company’s stock.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in SO. Cognios Capital LLC lifted its position in Southern by 8.1% during the second quarter. Cognios Capital LLC now owns 48,864 shares of the utilities provider’s stock worth $2,261,000 after buying an additional 3,672 shares during the period. Connor Clark & Lunn Investment Management Ltd. purchased a new position in Southern during the second quarter worth about $1,821,000. Barings LLC lifted its position in Southern by 34.3% during the second quarter. Barings LLC now owns 28,747 shares of the utilities provider’s stock worth $1,331,000 after buying an additional 7,341 shares during the period. KBC Group NV raised its holdings in shares of Southern by 9.5% in the 2nd quarter. KBC Group NV now owns 86,660 shares of the utilities provider’s stock worth $4,013,000 after purchasing an additional 7,547 shares during the period. Finally, Dividend Assets Capital LLC purchased a new position in shares of Southern in the 2nd quarter worth about $202,000. Hedge funds and other institutional investors own 56.58% of the company’s stock.
The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also constructs, acquires, owns, and manages power generation assets, including renewable energy facilities and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland, as well as provides gas marketing services, wholesale gas services, and gas midstream operations.
Featured Article: Asset Allocation Models, Which is Right For You?
For more information about research offerings from Zacks Investment Research, visit Zacks.com
Receive News & Ratings for Southern Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Southern and related companies with MarketBeat.com's FREE daily email newsletter.