Southern Company: A Buy Even If You Don't Believe The AI Hype; Dividend Aristocrat Status Near

2026-02-23 03:36:14 ET

Southern Company ( SO ) offers a low-volatility source of utility-scale income for income investors looking to add exposure to the AI boom. I am seeking total returns from the aggregate of its ongoing dividend yield and EPS expansion over the next few years, as electric load growth in the U.S. Southeast is set for significant growth through to the end of the decade. This is coming as hyperscalers, neoclouds, and data center-focused REITs look to tap into the growing demand for compute for AI applications. The electric utility last declared a quarterly cash dividend of $0.74 per share , unchanged sequentially, and $2.96 per share annualized for a 3.14% dividend yield. I expect dividend hikes in the low-to-mid single digits annually on the back of the company's annual growth guidance. I last covered SO with a Buy rating in September, with the ticker up 4% on a total return basis since....

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