Southern Co (SO): 4.8% Yield & Decades of Dividends

Southern Co (NYSE:SO) is a large cap utility that supplies electricity to 4.5 million customers in Georgia, Alabama, Mississippi, and Florida.

What stands out about Southern Company is its stability and consistency. The company has paid dividends every quarter since 1948. We also like that quant hedge funds AQR Capital and RenTech are the top two holders of Southern Company in Insider Monkey’s database.

In addition, the company has not reduced its dividend as far back as I can find. My records stopped in 1982 – it’s been at least that long since the company has been forced to reduce its dividend payments. The image below shows the company’s more recent dividend history:

These are not small dividends either. Southern Company currently has a dividend yield of 4.8%. The company’s long history of dividend payments makes it a member of the Dividend Achievers Index. Click here to download a list of all 238 members of the Dividend Achievers Index.

It’s not just Southern Company’s dividends that are stable. The company’s stock price exhibits low volatility as well. Southern Company’s 10 year average stock price standard deviation is just 16.9%.

For comparison, the only other large cap stocks I’ve found with lower standard deviations over the last decade are Johnson & Johnson (JNJ), and Consolidated Edison (ED).

If you are interested in high yields and stability with inflation beating growth, then Southern Company makes a compelling investment to consider further.

Business Overview

Southern Company generates over 90% of its earnings from the heavily regulated utilities industry. The remaining income comes from competitive wholesale electricity sales.

The image below shows the company’s current and ‘under-construction’ portfolio of power assets. The company’s entire portfolio is spread across the Southern half of the United States – hence the name ‘Southern Company’.