Using the PEG framework with analyst consensus forward EPS growth of 12.3% plus 2.8% dividend yield, The Southern Company has a fair value of $55.97 based on NTM EPS (FY2026) of $4.56. The current PEG ratio is 1.70.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 9.4% |
| Dividend Yield | +2.8% |
| Adjusted Growth (clamped 8–25%) | 12.3% |
| Fair P/E | 12.3x |
| NTM EPS (FY2026) | $4.56 |
| Fair Value | $55.97 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $3.92 | — | — |
| FY2026E | $4.56 | +16.4% | 13 |
| FY2027E | $4.92 | +7.8% | 14 |
| FY2028E | $5.36 | +9.0% | 14 |
| FY2029E | $5.76 | +7.4% | 9 |
| FY2030E | $6.15 | +6.9% | 13 |
5Y Forward EPS CAGR: 9.4%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $2.4B | $2.26 | — |
| FY2022 | $3.5B | $3.26 | +44.2% |
| FY2023 | $4.0B | $3.62 | +11.0% |
| FY2024 | $4.4B | $3.99 | +10.2% |
| FY2025 | $4.3B | $3.92 | -1.8% |
4Y Historical EPS CAGR: 14.8%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.