Thursday, June 14, 2012

Southern Company, CO - Utilities, the mother's milk of income investments

Dividend Machine for week of June 11, 2012 Southern Company (SO)
            Utilities, which are the mother’s milk of income investments, have not shown up too often on my dividend machine screens and I think that is because the dividend investment strategy is a crowded one right now.    Everybody who invests for income is hungry for yield and they have driven up the cost of income instruments.   Bonds are the most expensive but dividend stock prices have also been affected by this trade.

            However, Southern Company is such a good dividend machine that I have to include it in our 2012 dividend machine list.   Southern, symbol SO, is an electric utility that seems to do things right. Just look at Exelon to find a utility that has not been kind to its share holders.  Southern, on the other hand, has delivered a reliable dividend since 1948 and has increased it every year for the past 10 years.

            Fundamentally, SO, is solid with a D/E ratio (debt to equity ratio) consistent with the industry.  SO D/E is 1.17.   At Wednesday’s closing price of $47.31, the yield on the most recently declared dividend of $.49 is four percent.  The table below presents the data you need to know to evaluate if SO is a good fit for your dividend investment portfolio.


Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividends
Current Qtr Dividend
Annualized Div Yield
No. Years Div Increase
Debt/Equity ratio

            Consider this company for the income producing portion of your portfolio. 
Very Truly Yours,