How Earnings Growth and Trust Recognition at Southern (SO) Has Changed Its Investment Story

Southern Company reported higher net income and revenue for the third quarter and nine months ended September 30, 2025, and reaffirmed its regular quarterly dividend of US$0.74 per share, payable December 8, 2025. The company was also recognized as the highest-ranked U.S. energy firm on Newsweek's World's Most Trustworthy Companies 2025 list, highlighting its reputation and focus on clean, reliable energy. We'll explore how the combination of earnings growth and enhanced trustworthiness recognition may shape the investment argument for Southern.

AI is about to change healthcare. These 34 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

Southern Investment Narrative Recap

To be a shareholder in Southern Company today, you need conviction in long-term power demand growth across the Southeast and the company’s ability to profitably invest billions in new infrastructure. The latest earnings report points to steady growth, but these results do not materially alter the biggest short-term catalyst, which remains constructive regulatory approval for ongoing rate base expansions; nor do they change the main risk, potential earnings dilution from new equity issuance and large, rising capital costs.

Among recent announcements, the reaffirmed quarterly dividend of US$0.74 per share stands out, reflecting an ongoing commitment to paying shareholders even as Southern pursues aggressive capital spending. With dividend coverage under pressure as debt grows and free cash flow remains tight, this payout remains a closely watched indicator as the company manages the balance between rewarding investors and funding growth.

However, investors should also be aware that, despite these positive headlines, the risk of shareholder dilution and margin pressure from new equity and elevated capital spending still looms if...

Read the full narrative on Southern (it's free!)

Southern's outlook anticipates $31.7 billion in revenue and $5.8 billion in earnings by 2028. This is based on a 3.8% annual revenue growth rate and a $1.5 billion increase in earnings from the current $4.3 billion.

Uncover how Southern's forecasts yield a $100.08 fair value, a 5% upside to its current price.

Exploring Other PerspectivesSO Community Fair Values as at Oct 2025

Fair value estimates from the Simply Wall St Community span from US$92.53 up to US$315.41 across just three viewpoints. As capital needs climb and margin pressures persist, you’ll find no shortage of opinions on where Southern is headed, compare them to see which story you believe.

Story continues

Explore 3 other fair value estimates on Southern - why the stock might be worth over 3x more than the current price!

Build Your Own Southern Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

A great starting point for your Southern research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free Southern research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Southern's overall financial health at a glance.

Want Some Alternatives?

The market won't wait. These fast-moving stocks are hot now. Grab the list before they run:

This technology could replace computers: discover 28 stocks that are working to make quantum computing a reality. Find companies with promising cash flow potential yet trading below their fair value. Uncover the next big thing with financially sound penny stocks that balance risk and reward.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View comments