Southern Company’s Dividend Yield, Growth, and More

Dividend yield

Southern Company (SO) is the highest-yielding stock among the top utilities. Currently, Southern Company is trading at a dividend yield of 5.4%, while the Utilities Select Sector SPDR ETF (XLU) offers a yield of 3.3%. Southern Company increased its dividend per share 3.4% in 2018—compared to 2017. Southern Company’s dividend increased for the 17th consecutive year.

Southern Company’s Dividend Yield, Growth, and More

Peers’ dividend yields

Duke Energy (DUK) offers a yield of 4.6%. NextEra Energy (NEE), the biggest component of the Utilities ETF (XLU), is trading at a dividend yield of 2.6%.

Southern Company’s dividends grew 3.4% compounded annually in the last five years. In comparison, broader utilities increased their dividends per share ~4% compounded annually in the same period. Southern Company, the fourth-largest utility by market cap, plans to increase its dividends 4.0%–6.0% per year for the next few years. The target is roughly in line with Southern Company’s targeted EPS growth.

NextEra Energy is aiming for 13% annual dividend growth for the next few years, which is more than double the industry’s expected average dividend growth. To learn more, read NextEra Energy’s Dividend Profile and Growth Prospects.

Southern Company’s payout ratio was 76% for the last 12 months. A payout ratio indicates the portion of a company’s profits distributed to shareholders in the form of dividends. Duke Energy had a payout ratio of 83% in the last 12 months. NextEra Energy had a payout ratio of 59%, which was lower than the industry average.