Kettle Hill Capital Management LLC Invests $12.27 Million in Southern Company (The) $SO

Key Points

• Kettle Hill Capital Management bought a new stake of 129,463 shares in Southern Company valued at about $12.27 million, representing roughly 2.8% of the fund's portfolio and its 19th-largest holding.
• Analysts are mixed but the consensus rating is Hold with a consensus price target of $98.08; recent actions include Evercore upgrading to "Outperform" (PT $111) while Morgan Stanley and Jefferies maintained underweight/hold views.
• Southern's latest quarter missed EPS by $0.01 (reported $0.55 vs. $0.56 expected) while revenue rose 10.1% to $6.98 billion, and the company pays a quarterly dividend of $0.74 (annualized $2.96, ~3.0% yield, payout ratio ~75%).

Kettle Hill Capital Management LLC bought a new stake in Southern Company (The) (NYSE:SO - Free Report) during the third quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund bought 129,463 shares of the utilities provider's stock, valued at approximately $12,269,000. Southern accounts for about 2.8% of Kettle Hill Capital Management LLC's portfolio, making the stock its 19th biggest position.

Other hedge funds have also recently added to or reduced their stakes in the company. Cloud Capital Management LLC bought a new stake in shares of Southern in the 3rd quarter valued at approximately $25,000. Grey Fox Wealth Advisors LLC bought a new stake in Southern in the third quarter valued at $29,000. Steigerwald Gordon & Koch Inc. acquired a new position in Southern during the third quarter worth $34,000. Chilton Capital Management LLC lifted its holdings in shares of Southern by 120.1% during the third quarter. Chilton Capital Management LLC now owns 361 shares of the utilities provider's stock valued at $34,000 after acquiring an additional 197 shares during the period. Finally, Aster Capital Management DIFC Ltd acquired a new stake in shares of Southern in the 3rd quarter valued at $35,000. Institutional investors and hedge funds own 64.10% of the company's stock.

Analysts Set New Price Targets

A number of brokerages recently issued reports on SO. Jefferies Financial Group reiterated a "hold" rating and set a $102.00 target price on shares of Southern in a research report on Monday, February 23rd. Morgan Stanley reaffirmed an "underweight" rating on shares of Southern in a report on Friday, February 20th. JPMorgan Chase & Co. reduced their target price on Southern from $104.00 to $93.00 and set a "neutral" rating on the stock in a report on Monday, December 15th. Weiss Ratings restated a "buy (b)" rating on shares of Southern in a research report on Wednesday, January 21st. Finally, Evercore raised Southern from an "in-line" rating to an "outperform" rating and set a $111.00 price target for the company in a report on Thursday, March 5th. Six investment analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of "Hold" and a consensus price target of $98.08.

Southern Trading Up 0.2%

SO opened at $98.06 on Monday. Southern Company has a 1-year low of $83.09 and a 1-year high of $100.83. The stock has a market capitalization of $107.97 billion, a PE ratio of 24.95, a PEG ratio of 2.96 and a beta of 0.44. The company has a current ratio of 0.65, a quick ratio of 0.47 and a debt-to-equity ratio of 1.69. The firm has a 50-day moving average price of $91.79 and a two-hundred day moving average price of $91.57.

Southern (NYSE:SO - Get Free Report) last announced its earnings results on Wednesday, February 18th. The utilities provider reported $0.55 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.56 by ($0.01). Southern had a return on equity of 12.52% and a net margin of 14.69%.The company had revenue of $6.98 billion for the quarter, compared to analyst estimates of $6.41 billion. During the same quarter in the previous year, the company posted $0.50 earnings per share. Southern's revenue for the quarter was up 10.1% on a year-over-year basis. As a group, equities analysts anticipate that Southern Company will post 4.29 earnings per share for the current fiscal year.

Southern Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, March 6th. Shareholders of record on Tuesday, February 17th were issued a dividend of $0.74 per share. The ex-dividend date of this dividend was Tuesday, February 17th. This represents a $2.96 annualized dividend and a yield of 3.0%. Southern's dividend payout ratio is currently 75.32%.

Southern Profile

Southern Company NYSE: SO is an Atlanta-based energy holding company that provides electric and gas utility services and owns power generation assets across the United States. Founded in 1945, the company operates a portfolio of regulated electric utilities and affiliated businesses that generate, transmit and distribute electricity to residential, commercial and industrial customers.

Southern's principal regulated electric subsidiaries include Georgia Power, Alabama Power and Mississippi Power, which serve large portions of the southeastern United States.

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