Southern Company (SO) — This Atlanta-based energy holding company is one of the largest producers of electricity in the U.S. According to Credit Suisse, it remains a “best-in-class” utility, offering a combination of strong annual earnings growth of 5% to 7%, along with a 4.6% yield. During the past 10 years, with dividend reinvestment, investors would have received a compounded annual return of over 11% per year.
S&P analysts look for a target of $49. This may seem modest, but the stock’s steady appreciation and dividend increases make it a haven in times of uncertainty and a good value following a pullback of 10% from its high.
Technically, the stock’s near-term objective is in the high $40s. It is also recommended as a long-term buy. Continue to hold SO for its dividend income, stability and performance.