Southern Company (NYSE: SO) is well-known for its reliable dividend payments, making it popular among investors who focus on income. As a major energy provider worth $99 billion, Southern Company has raised its dividend for 24 straight years.
This track record, along with a strong financial base, makes it an attractive option for dividend investors. However, whether it is the best choice depends on individual investment goals.
Key Dividend Attributes
- Dividend Yield and Growth: Southern Company has a dividend yield of about 3.14% to 3.26%, depending on the stock price. The company has increased its annual dividend to $2.96 per share, an increase of 8 cents from the previous year. This steady growth shows Southern’s commitment to providing reliable returns to its shareholders.
- Payout Ratio and Stability: The payout ratio is around 74.19%, meaning Southern Company pays out a large part of its earnings as dividends. This ratio is below the 70% risk threshold typically mentioned for utility companies, suggesting that Southern can keep its dividend even during tough economic times.
- Market Position and Risks: As a regulated utility, Southern Company enjoys stable revenue and less volatility than many other sectors. However, it still faces risks from rising interest rates and regulatory changes.
Comparison with Other Dividend Stocks
When comparing Southern Company to other dividend stocks like Dominion Energy (NYSE: D), investors should think about their priorities. Dominion Energy has a higher dividend yield, appealing to those who want immediate income.
On the other hand, Southern Company offers a growing dividend, which may suit investors looking for long-term growth and stability.