Southern Co 'Tricity, Gas & Comm For 9M Folks
This week I'm seeking the one and only dividend-paying stock from the utilities business sector for my Ivy portfolio.
That utilities sector has five industries including diversified, independent, regulated electric, regulated gas, and regulated water.
Today I'm reviewing a Large-cap regulated electric company, named Southern Company. Its trading ticker symbol is SO.
Southern Co is an electricity generating company. It develops, constructs, acquires, owns, and manages generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland, as well as provides gas marketing services, wholesale gas services, and gas midstream operations.
The company has 46,000 megawatts of generating capacity and 1,500 billion cubic feet of combined natural gas consumption and throughput volume serving 9 million electric and gas utility customers.
It also provides products and services in the areas of distributed generation infrastructure, energy efficiency, and utility infrastructure. In addition, the company offers digital wireless communications services with various communication options, including push to talk, cellular service, text messaging, wireless Internet access, and wireless data.
The Southern Company was founded in 1945 and is headquartered in Atlanta, Georgia.
I use three key data points to gauge the value of any dividend equity or fund like Southern Company:
(1) Price
(2) Dividends
(3) Returns
Besides those three, four more keys will finally unlock an equity or fund in which to invest.
But those first three primary keys, best tell whether a company has made, is making, and will make money.
SO Price
Southern's price per share was $47.26 at yesterday's market close. A year ago its price was $51.36 for a price drop of $4.10 per share for the year, that's an 8% tumble.
Assuming Southern's price will trade in the range of $40 to $55 next year, Southern Co's recent $47.26 price could improve by $4.00 and grow to $51.26 by mid-November, 2019.
SO Dividends
Southern Company's most recent quarterly dividend was $0.60 declared October 15th and payable December 6th.
That $.60 quarterly stipend equates to an annual dividend of $2.40, yielding 5.08% at yesterday's closing $47.26 price.
Gains For SO?
Adding the $2.40 calculated annual dividend to my estimated $4.00 annual price upside for Southern Co makes a $6.40 potential gross annual per share gain, which will be reduced by costs to trade the shares.
A little under $1,000.00 invested today at the $47.26 recent price buys 21 Southern Co. shares.
A $10 broker fee paid half at purchase and half at sale costs $0.48 per share
Subtracting that $0.48 brokerage cost from the estimated $6.40 gross annual gain leaves a net gain of $5.92 X 21 shares
= $124.32
for a 12.4% net gain on a $992.46 investment.
Therefore, Southern Company, whose trading ticker symbol is SO, now shows a possible 12.4% net gain including a 5.08% dividend yield.
Twenty-one brokers cover this stock:
One broker says "buy" SO
Two brokers say SO will "outperform" its peers.
Eleven say "hold" your SO shares
Three think SO will "underperform" peers
Four say "sell" now.
Those twenty-one Wall Street wizards collectively price SO shares at $46.32 next November. That's $1.22 under the current price and $5.22 below my $51.26 estimate.
Therefore, you may look at these speculative numbers as follows: Southern Company whose trading ticker symbol is SO, has made money, is making money, and could net a 0% to a 12.4% net annual gain including a 5.08% dividend yield.
It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to determine if Southern Company is worth your time and money.
Disclaimer:
This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...
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