Southern Company (SO)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 7,880,000 | 7,997,000 | 7,701,000 | 6,974,000 | 6,531,000 | 5,774,000 | 5,731,000 | 5,949,000 | 5,828,000 | 5,247,000 | 4,770,000 | 3,953,000 | 4,341,000 | 5,234,000 | 5,432,000 | 5,756,000 | 5,338,000 | 5,200,000 | 5,446,000 | 5,732,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 33,208,000 | 33,298,000 | 32,449,000 | 31,920,000 | 31,444,000 | 31,377,000 | 30,672,000 | 30,528,000 | 30,408,000 | 31,481,000 | 28,973,000 | 28,588,000 | 28,164,000 | 28,980,000 | 28,490,000 | 28,773,000 | 28,263,000 | 28,580,000 | 27,961,000 | 28,016,000 |
| Return on total capital | 23.73% | 24.02% | 23.73% | 21.85% | 20.77% | 18.40% | 18.68% | 19.49% | 19.17% | 16.67% | 16.46% | 13.83% | 15.41% | 18.06% | 19.07% | 20.00% | 18.89% | 18.19% | 19.48% | 20.46% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $7,880,000K ÷ ($—K + $33,208,000K)
= 23.73%
The return on total capital for Southern Company has shown some fluctuations over the reported periods.
The trend indicates that the return on total capital was relatively stable around the 18% - 20% range from March 2020 to December 2021. However, there was a significant decline in the return on total capital in the first quarter of 2022 and the second quarter of 2022, dropping to around 13% and then rebounding to around 16%, respectively.
From the third quarter of 2022 to the end of 2024, the return on total capital exhibited a consistent upward trend, reaching a peak of 24.02% in September 2024. This improvement suggests that Southern Company's ability to generate profits from its total capital investments strengthened during this period.
Overall, the upward trajectory in the return on total capital from the second half of 2022 to the end of 2024 indicates an improvement in the company's efficiency in utilizing its total capital to generate returns for its stakeholders.
Peer comparison
Dec 31, 2024