Investors Purchase High Volume of Southern Call Options (NYSE:SO)

Key Points

• Unusual options activity: Investors bought 6,527 Southern call options, 33% above the typical volume of 4,908, signaling increased bullish options interest.
• Quarterly performance and dividend: Southern reported quarterly EPS of $1.13, beating estimates by $0.12, and declared a quarterly dividend of $0.76 per share, representing a 3.3% annualized yield.
• Mixed analyst outlook: Analysts have an average “Hold” rating and a consensus price target of $98.24, with recent targets ranging from $74 to $104 and both buy and underweight ratings issued.

Southern Company (The) (NYSE:SO - Get Free Report) saw some unusual options trading activity on Friday. Stock traders bought 6,527 call options on the company. This represents an increase of 33% compared to the typical volume of 4,908 call options.

Southern Price Performance

Shares of SO traded down $0.72 during trading hours on Friday, reaching $93.10. 1,361,934 shares of the stock traded hands, compared to its average volume of 5,831,217. The company has a current ratio of 0.79, a quick ratio of 0.59 and a debt-to-equity ratio of 1.62. Southern has a 52-week low of $81.69 and a 52-week high of $99.58. The company's 50-day moving average price is $87.63 and its two-hundred day moving average price is $91.97. The company has a market cap of $107.10 billion, a P/E ratio of 22.33, a price-to-earnings-growth ratio of 2.38 and a beta of 0.31.

Southern (NYSE:SO - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The utilities provider reported $1.13 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.01 by $0.12. The business had revenue of $6.98 billion during the quarter, compared to analyst estimates of $7.23 billion. Southern had a return on equity of 12.93% and a net margin of 15.43%. Southern's revenue for the quarter was up .1% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.79 EPS. On average, analysts anticipate that Southern will post 4.59 earnings per share for the current year.

Southern Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Monday, December 7th. Investors of record on Monday, November 16th will be paid a dividend of $0.76 per share. This represents a $3.04 annualized dividend and a yield of 3.3%. The ex-dividend date of this dividend is Monday, November 16th. Southern's dividend payout ratio (DPR) is 72.90%.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Evergreen Advisors LLC bought a new stake in shares of Southern during the first quarter valued at approximately $25,000. Scarborough Advisors LLC bought a new position in shares of Southern during the first quarter worth $25,000. Bullseye Investment Management LLC purchased a new position in Southern during the second quarter valued at $26,000. J.Safra Asset Management Corp purchased a new position in Southern during the second quarter valued at $30,000. Finally, Frazier Financial Advisors LLC bought a new stake in Southern in the 2nd quarter valued at $31,000. 64.10% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

Several research analysts have recently issued reports on the stock. KeyCorp cut their target price on shares of Southern from $79.00 to $74.00 and set an "underweight" rating on the stock in a report on Tuesday, October 13th. Morgan Stanley lowered their price objective on Southern from $85.00 to $84.00 and set an "underweight" rating for the company in a research note on Wednesday. HSBC initiated coverage on Southern in a research note on Thursday. They issued a "buy" rating and a $99.50 price target for the company. Citigroup dropped their price target on shares of Southern from $114.00 to $104.00 and set a "buy" rating on the stock in a research note on Friday, September 25th. Finally, Weiss Ratings restated a "buy (b)" rating on shares of Southern in a research report on Wednesday, July 29th. Eight research analysts have rated the stock with a Buy rating, nine have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the company has an average rating of "Hold" and a consensus price target of $98.24.

About Southern

Southern Company NYSE: SO is an energy holding company headquartered in Atlanta, Georgia. Through its subsidiaries, the company generates, transmits, distributes and sells electricity, while also providing natural gas distribution and related energy services.

Southern's electric utility operations include Alabama Power, Georgia Power and Mississippi Power, which serve customers across Alabama, Georgia and Mississippi. The company's generation portfolio includes nuclear, natural gas, coal, hydroelectric and renewable energy resources.

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