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A Dividend Stock To Retire On: Southern Company

Apr. 09, 2018 7:28 AM ETThe Southern Company (SO)60 Comments
Kenny Robinson profile picture
Kenny Robinson


  • This long time dividend payer operates a defensive industry and has 1/10th of the volatility of the broader markets.
  • With 16 years of consecutive dividend increases, income-minded investors have been able to retain their purchasing power by holding this stock.
  • Read below to get the "lowdown" on this defensive gem of a stock.

Investment Thesis

For investors who seek long-term steady dividend income and low volatility, Southern Company (NYSE:SO) deserves heavy consideration.

The utility giant has paid an uninterrupted dividend since 1948 and has provided 16 years of consecutive dividend increases.

With a total return of 17.93% over the past five years and a beta of 0.10, I believe this stock is a nice pick for those looking for a defensive income play.

Follow along below as I dig deeper into this gem of a stock and provide detail on the company's operations.

The Company

Simply put, Southern Company engages in the generation, transmission, and distribution of electricity as well as the distribution of natural gas which results in approximately 9 million electric and gas utility customers.

Image result for southern companySource

The company also constructs, acquires, owns, and manages power generation assets, including renewable energy facilities and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland, as well as provides gas marketing services, wholesale gas services, and gas midstream operations.


You can see from the graphic above that Southern Company is emerging as a renewable energy powerhouse, (35 solar facilities, 8 wind facilities, 1 biomass facility, and 1 landfill gas facility) and that's good news for shareholders long term as these solar and wind projects come with tax benefits and cash flow.

Southern company constructs, operates, and maintains 82,000 miles of natural gas pipelines (pictured in the map above) and 14 storage facilities with total capacity of 158 Bcf to provide natural gas to residential, commercial, and industrial customers.

In addition, the company also owns and/or operates 33 hydroelectric generating stations, 29 fossil fuel generating stations, 3 nuclear generating stations (one pictured below), 15 combined cycle/cogeneration stations.

Pictured above: Southern Company's Vogtle nuclear

This article was written by

Kenny Robinson profile picture
I no longer write for Seeking Alpha. You can find me on YouTube: Kenny Robinson Channel

Analyst’s Disclosure: I am/we are long SO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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