Is The Southern Company (SO) Worth Buying?

Page 2 of 2

NextEra Energy is an electric utility company engaging in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. The company is headquartered in Florida and has a power generation capacity of 43,000 megawatts. NextEra Energy, Inc. (NYSE:NEE), with its subsidiaries, operates hydroelectric, wind, solar, natural gas, oil, coal, and nuclear generation sources to generate electricity.

The stock is on a rally and currently trading at the level of $79. The net income of $1.9 billion for NextEra is less than the net income of $2.35 billion for The Southern Company (NYSE:SO). Also, the margins and revenue growth rate of NextEra are less than that of Southern Company.

CenterPoint Energy, Inc. (NYSE:CNP) engages in the electric transmission and distribution business in Houston. CenterPoint Energy has a market capital of $10 billion but it is much lesser than Southern Company’s market capital of $41 billion. The stock of CenterPoint has a yield of 3.5%, which is less than the yield of 4.33% for Southern Company. .

Conclusion

Southern Company’s stock has a yield of 4.33% and its dividend has increased by an average of 4% per year in the past seven years. Its revenue growth estimates and margins are good. The Southern Company (NYSE:SO) is a buy for the long-term. It is a good investment for people who are looking for steady and continuous returns and dividends.

The article This Electric Utility Stock Is a Buy originally appeared on Fool.com and is written by Shas Dey.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2