‘Best-in-Class’ Utility Offers Stability and Growth (Plus a 4.6% Yield)

Southern Co.'s steady appreciation, dividend increases make it a haven in times of uncertainty


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.

SO Chart
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Article printed from InvestorPlace Media, http://investorplace.com/2013/06/trade-of-the-day-southern-company-so/.

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