Southern Company (SO) is slightly undervalued and Xcel Energy Inc (XEL) is slightly overvalued.
Against our estimates of intrinsic value, SO trades at the wider discount: a margin of safety of +9%, against -8% for XEL.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 6.8% (average of 2 methods) values the shares at $93.38; the price of $85.15 is 9% below that value.
Leak Score 37/100 on 10 of 12 signals
Discounting its cash flows at 7.7% (average of 2 methods) values the shares at $66.77; the price of $72.06 is 8% above that value.
Leak Score 37/100 on 10 of 12 signals
| Metric | SO | XEL |
|---|---|---|
| Verdict | Slightly undervalued | Slightly overvalued |
| Price | $85.15 | $72.06 |
| Intrinsic value | $93.38 | $66.77 |
| Margin of safety | +9% | -8% |
| Leak Score | 37/100 (10/12) | 37/100 (10/12) |
| Market cap | $98.0B | $45.0B |
| Revenue growth, 5 years | 7.9% | 4.9% |
| Operating margin | 24.2% | 21.2% |
| Net margin | 15.4% | 15.3% |
| Return on equity | 12.7% | 9.9% |
| Debt to equity | 1.95 | 1.73 |
| P/E | 20.6x | 19.7x |
| Forward P/E | 17.3x | 15.8x |
| P/B | 2.5x | 1.9x |
| Dividend yield | 3.6% | 3.3% |