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.
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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.