SO - Southern Company: Why It Will Benefit From Rate Cuts

2024-01-30 18:30:30 ET

Summary

• The Southern Company is involved in electricity generation, transmission, and distribution.
• Utilities are cyclical and as interest rate cuts are expected, I think now is a great entry point as we await the cycle shift.
• The company offers a quarterly dividend of $0.70/share with a current dividend yield of about 4%.

Overview

I always find it cool that you're able to invest your money in things that increase the quality of our lives. I strongly believe that The Southern Company (SO) is one of those businesses because everyone benefits from electricity. A bonus is that these types of businesses are usually cash intensive since everyone typically pays for this utility and therefore, the dividend is usually consistent. The Southern Company is "involved in the generation, transmission, and distribution of electricity. The company operates through three main segments: Gas Distribution Operations, Gas Pipeline Investments, and Gas Marketing Services. Additionally, it engages in the development and management of power generation assets, including renewable energy projects." The company sells electricity in the wholesale market and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee. Looking at their total energy mix, the majority of it is comprised of natural gas. This is followed by coal at 17%, nuclear at 16%, and renewables at 15%....

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