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The Future of Southern Company: Investor Expectations

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Part 3
The Future of Southern Company: Investor Expectations PART 3 OF 4

Comparing Southern Company’s Returns with Those of Peers

Total returns among utilities

The second-largest regulated utility, Southern Company (SO), has disappointed investors in terms of total returns over the past few years. In the past year, SO returned (including dividends) 10%, while over the past five years, its returns have come in at 8%, compounded annually.

Remember, total returns consider the stock’s appreciation and the dividends paid during a particular period.

Comparing Southern Company’s Returns with Those of Peers

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Peers and the broader industry: total returns by comparison

By comparison, the Utilities Select Sector SPDR ETF (XLU), which represents the broader industry, has returned 22% in the past year, while over the past five years, its returns come to a grand total of 14%, compounded annually.

Notably, the biggest of the S&P 500 utilities, NextEra Energy (NEE), has outperformed peers by a huge margin. In the past year, it has returned 35%, while over the past five years, NEE has returned 21%, compounded annually.

We should highlight that Southern Company has underperformed peers for all the time periods we’ve considered.

Continue to the next and final part of this series for a look at price targets and analyst recommendations.

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