Analyzing Evergy (NASDAQ:EVRG) & Southern (NYSE:SO)

Southern (NYSE:SO) and Evergy (NASDAQ:EVRG) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Valuation & Earnings

This table compares Southern and Evergy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern	$29.55 billion	3.37	$4.34 billion	$4.17	20.79
Evergy	$5.96 billion	3.13	$855.60 million	$3.94	20.52

Southern has higher revenue and earnings than Evergy. Evergy is trading at a lower price-to-earnings ratio than Southern, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Southern has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Evergy has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Southern and Evergy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern	2	11	7	0	2.25
Evergy	0	3	8	0	2.73

Southern currently has a consensus price target of $100.09, indicating a potential upside of 15.47%. Evergy has a consensus price target of $90.60, indicating a potential upside of 12.07%. Given Southern’s higher possible upside, equities analysts clearly believe Southern is more favorable than Evergy.

Insider & Institutional Ownership

64.1% of Southern shares are owned by institutional investors. Comparatively, 87.2% of Evergy shares are owned by institutional investors. 0.2% of Southern shares are owned by insiders. Comparatively, 1.5% of Evergy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Southern and Evergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern	15.43%	12.93%	3.28%
Evergy	15.19%	9.20%	2.76%

Dividends

Southern pays an annual dividend of $3.04 per share and has a dividend yield of 3.5%. Evergy pays an annual dividend of $2.78 per share and has a dividend yield of 3.4%. Southern pays out 72.9% of its earnings in the form of a dividend. Evergy pays out 70.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Southern has raised its dividend for 25 consecutive years and Evergy has raised its dividend for 20 consecutive years. Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Southern beats Evergy on 11 of the 17 factors compared between the two stocks.

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations. In addition, it owns and operates nuclear, coal, hydro, cogeneration, solar, wind, battery storage, and fuel cell facilities. Further, the constructs, operates, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.9 million electric and gas utility customers. Further, it develops distributed energy and resilience solutions; deploys microgrids for commercial, industrial, governmental, and utility customers; and offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.