Financial Contrast: Southern (NYSE:SO) vs. Spruce Power (NYSE:SPRU)

Spruce Power (NYSE:SPRU) and Southern (NYSE:SO) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Institutional & Insider Ownership

20.8% of Spruce Power shares are owned by institutional investors. Comparatively, 64.1% of Southern shares are owned by institutional investors. 9.5% of Spruce Power shares are owned by company insiders. Comparatively, 0.3% of Southern shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Spruce Power and Southern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spruce Power	0	0	0	0	N/A
Southern	1	5	5	1	2.50

Southern has a consensus target price of $73.46, suggesting a potential upside of 2.41%. Given Southern’s higher probable upside, analysts plainly believe Southern is more favorable than Spruce Power.

Risk and Volatility

Spruce Power has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Southern has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spruce Power	-82.70%	-7.24%	-1.95%
Southern	15.79%	11.40%	2.90%

Earnings and Valuation

This table compares Spruce Power and Southern’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spruce Power	$79.86 million	0.91	-$66.04 million	($3.59)	-1.11
Southern	$25.25 billion	3.10	$3.98 billion	$3.63	19.76

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

Summary

Southern beats Spruce Power on 12 of the 14 factors compared between the two stocks.

About Spruce Power

Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and small businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 72,000 customers. The company is headquartered in Denver, Colorado.

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.