A Stable Utility With 25 Years Of Dividend Growth
Most of us like dividend stocks for their stability.
It’s nice getting some cash every quarter from the stocks we own.
However, even dividend stocks can have periods of crazy price movements.
The past two months have been pretty nerve-wracking with the war in Iran.
It seemed the stock market was going to fall off a cliff in March, but then in April, the market had its best month since COVID.
The stock market can be scary sometimes!
However, the good news is there are still stocks out there paying dividends while ignoring all of the turmoil around the world.
Southern Co (ticker: SO) is one of the largest utility companies in the United States.
It primarily operates in Georgia, Alabama, Illinois, and Virginia, but also serves as a wholesale clean energy distributor and utility technology company throughout the country.
Southern is a massive company.
Last year, it made over $4 billion in income.
And Southern has a great dividend.
Currently, Southern’s dividend yield sits just above 3%.
The utility just raised its dividend again, marking 25 years of consecutive dividend increases.
Now, Southern pays $0.76 each quarter, which is almost 3% higher than last year.
To get the higher payment, you need to own Southern by May 15 (Friday).
The dividend yield and growth don’t sound like much, but part of the problem is Southern’s success.
Southern’s dividend yield continues to drop (blue line) as its stock price rises (red line).
However, the most enticing part is Southern’s beta.
Beta measures a stock’s volatility relative to the overall market.
A value higher than 1 means the stock is more volatile, and a value less than 1 means the stock is less volatile.
Investopedia has an article with more detail about beta, if you’re interested.
Southern’s beta is only 0.36, which is one of the lowest in the entire S&P 500 index.
What does it mean?
Southern’s stock price is much more stable than the rest of the stock market.
But Southern is more than just stability and dividends, it’s also incredibly profitable.
Its profit margin of 14% is one of the highest among companies in the utilities industry.
Plus, Southern’s operating income has grown by an average of double-digits each year over the past 5.
Are you looking for some stability in a crazy stock market?
Michael Jennings, Editor
Dividend Stocks Research
Category: Dividend Stocks To Buy?
