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New Post has been published on http://www.stockmarketsdaily.com/undervalued-buy-southern-company-nyseso/10317/
Income Buy: Southern Company (NYSE:SO)
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With Southern Company (NYSE:SO) offering investors a roughly 4.48% dividend yield many are chasing this company as a great inome play. Below we look at SO from a value and growth perspective to see how the numbers stack up.
Southern Company (NYSE:SO) last traded at $46.89 after moving up 0.90% for the trading day.
SO is trading with a trailing 12 month P/E multiple of 21.31 and an estimated forward P/E multiple of 15.98. The stock has an estimated 5 year annual growth of 3.40% and a PEG multiple of 6.27.
From a value investor perspective, as mentioned Southern Company trades on an estimated forward P/E multiple of 15.98. The current estimated forward P/E ratio for the market as a whole is approximately 19.82. Therefore, for value investors SO appears to be underpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Southern Company (NYSE:SO). This PEG multiple takes into account the expected long term growth in earnings of Southern Company rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of SO being 6.27, we consider Southern Company to likely be overpriced.
The mean analyst 12 month target price for Southern Company (NYSE:SO) is currently $48.03 or 2.43% above the current price. Additionally, the stock has been as high as $53.16 and as low as $41.59 in the last 52 weeks. Analysts are estimating that SO will report earnings per share of $0.70 next quarter.