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Southern Company’s Dividend Compared to Its Peers

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Southern Company’s dividend

Southern Company (SO) is trading at a dividend yield of 4.9%, which is notably higher than broader utilities’ average yield close to 3.3%. Southern Company has one of the longest dividend payment histories among the top utilities. The company has increased its dividend for 17 consecutive years. Duke Energy (DUK) is trading at a dividend yield of 4.1%, while PPL (PPL) offers a yield of 5.2%.

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Total returns

Southern Company’s superior yield and long dividend history fade when it comes to the total returns. Southern Company significantly lagged its peers in terms of total returns due to its weak market performance in the last few years. In the last five years, Southern Company returned 48% including dividends, while utilities (XLU) at large returned 68%.

Dividend growth

Southern Company’s dividend yield is higher than many of its peers. However, the company lags its peers in terms of dividend growth. Southern Company’s dividends per share rose 3.4% compounded annually in the last five years.

Broader utilities increased their dividends per share ~4% during the same period. Duke Energy increased its dividends 3%, while PPL’s dividend growth rate was more than 2% in the last five years.

To learn about utilities’ valuations, read Top Utility Stocks: Analyzing the Current Valuations.

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