Southern
Through the investors’ lenses
Each of these investors has said in public what they look at before buying. Click a name to see how this company measures up — a tick where it passes one of their tests, a cross where it does not.
Warren Buffett 2/4
| Measure | SO | Checked against | |
|---|---|---|---|
| Owner earnings | $-2.37bn | positive | ✗ |
| Return on equity | 12.1% | median 11.7% | ✓ |
| Debt to equity | 1.82x | median 0.79x | ✗ |
| Operating margin | 25.2% | median 15.0% | ✓ |
Passes 2 of 4. To be clear: Warren Buffett has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Terry Smith 2/4
| Measure | SO | Checked against | |
|---|---|---|---|
| Return on capital employed | 7.2% | median 10.1% | ✗ |
| Cash conversion | 2.26x | median 1.78x | ✓ |
| Operating margin | 25.2% | median 15.0% | ✓ |
| Debt to equity | 1.82x | median 0.79x | ✗ |
Passes 2 of 4. To be clear: Terry Smith has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Charlie Munger 2/3
| Measure | SO | Checked against | |
|---|---|---|---|
| Return on capital employed | 7.2% | median 10.1% | ✗ |
| Return on equity | 12.1% | median 11.7% | ✓ |
| Operating margin | 25.2% | median 15.0% | ✓ |
Passes 2 of 3. To be clear: Charlie Munger has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Chuck Akre 2/4
| Measure | SO | Checked against | |
|---|---|---|---|
| Return on equity | 12.1% | median 11.7% | ✓ |
| Debt to equity | 1.82x | median 0.79x | ✗ |
| Cash conversion | 2.26x | median 1.78x | ✓ |
| Return on equity, sustained | 4 of 10 | 8 of 10 above median | ✗ |
Passes 2 of 4. To be clear: Chuck Akre has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Philip Fisher 3/4
| Measure | SO | Checked against | |
|---|---|---|---|
| Operating margin | 25.2% | median 15.0% | ✓ |
| Net margin | 15.0% | median 10.2% | ✓ |
| Return on capital employed | 7.2% | median 10.1% | ✗ |
| Operating margin, held or improving | 25.2% | 10-yr median 22.5% | ✓ |
Passes 3 of 4. To be clear: Philip Fisher has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Walter Schloss 0/2
| Measure | SO | Checked against | |
|---|---|---|---|
| Current ratio | 0.65x | median 1.25x | ✗ |
| Debt to equity | 1.82x | median 0.79x | ✗ |
Passes 0 of 2. To be clear: Walter Schloss has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Benjamin Graham 1/2
| Measure | SO | Checked against | |
|---|---|---|---|
| Current ratio | 0.65x | 2.00x published | ✗ |
| Long-term debt to working capital | — | 1.00x published | — |
| Positive earnings, ten years running | 10 yrs | 10 published | ✓ |
Passes 1 of 2. To be clear: Benjamin Graham has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Joel Greenblatt 0/1
| Measure | SO | Checked against | |
|---|---|---|---|
| Return on capital employed | 7.2% | median 10.1% | ✗ |
Passes 0 of 1. To be clear: Joel Greenblatt has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
Peter Lynch 1/2
| Measure | SO | Checked against | |
|---|---|---|---|
| Debt to equity | 1.82x | median 0.79x | ✗ |
| Net margin | 15.0% | median 10.2% | ✓ |
Passes 1 of 2. To be clear: Peter Lynch has never said anything about Southern. These are the company’s own figures put through the tests he described. What he looks at, and why →
| Basis | Payout | Why |
|---|---|---|
| GAAP earnings | 75.0% | whyThe dividend is set against the allowed return on the rate base. |
| Operating cash flow | 30.8% | whyBefore the capital programme the regulator expects. |
| Free cash flow | negative | whyOCF fell $2,935m short of capex — normal for a utility funding its rate base. |
Spread between highest and lowest: 44.2 percentage points. Same filings, different denominators.
Coverage rating 51 / 100 — Tight. ? Peer standing 10/50Direction 25/30Stability 15/20
GAAP earnings payout, last 6 years
| Fiscal year | Payout |
|---|---|
| 2025-12-31 | 75.0% |
| 2024-12-31 | 71.7% |
| 2023-12-31 | 76.8% |
| 2022-12-31 | 82.8% |
| 2021-12-31 | 117.0% |
| 2020-12-31 | 86.7% |
21% of the 57 utilities here pay out more — at the demanding end.
The arithmetic
- GAAP earnings — dividends declared per share $2.94 ÷ diluted EPS $3.92
- Operating cash flow — dividends paid $3,015m ÷ operating cash flow $9,802m
- Free cash flow — dividends paid $3,015m ÷ (operating cash flow $9,802m − capex $12,737m)
Where the figures came from
- 10-K filed 2026-02-19 · accession 0000092122-26-000006
All public at sec.gov — you should not have to take our word for it.
Computed straight from SEC XBRL. A number that looks wrong to you is more useful to us than agreement — tell us.
What the GAAP earnings payout ratio measures, and where every company here sits on it.
Also on: rated tight · when it files.
When this changes
Every figure above is recomputed whenever Southern files. The monthly letter carries what filed, what moved, and one finding computed across every company here.