It hasn't raised its dividend since 2007 and it's required an ever larger % payout over the last several years as earnings have generally dropped. It's earnings are expected to continue to drop over this year and next year. It's long term debt is over 50% of it's equity. Return on Equity has gradually dropped over the past decade to an anemic 5.8%. This is a measure of how well the company puts new money to work and it doesn't do it well.
Analyst consensus is that it will grow earnings an average of 1.74% annually over the next 5 years.
Nevertheless S&P awards it 3 stars (HOLD). This is probably due to the fact that electric utilities as a sector have had declining profits in recent years.
Consequently, with SO being an electric company, it's surprising that SO looks more like one the stock examples you see in books like "Buffettology:" most things about it seem to point to probable slow positive growth. It's earnings and revenues make a slow steady growth over the past decade with an understandable dip in 2008 that it recovered from by the end of 2009. Dividends have grown consistently over the past decade. S&P reports rates it 4-stars and says, "We believe the company should benefit from an improved economic outlook and expect the shares to trade at a premium to SO's peers, on its financial strength and the relative pre-dictability of its dividend stream..."
Long Term Debt is 52.7% of capitalization, somewhat high, but it's been over 50% for a decade and has been dropping down from 57.4% a few years back.
Return on Equity has been in the low teens most of the past decade and has risen from 11.7% to 13.1% over the last three years, indicating an improving ability to put new earnings to work.
Analyst consensus is that it will grow earnings an average of 4.28% annually over the next 5 years. That plus the 5% dividend represent a solid 9% annual return from the stock.
Even though FE offers a 6.0% dividend and SO a 5.0% dividend, SO is the company in which I'd rather invest.
I have been saving that way for decades and many relatively small purchases allowed me to retire at age 56. Whenever it seemed practical, I added $25 here or there either to a new stock/fund or by increasing the amount at stock/fund I already owned and slowly ratcheted the total up. Up until the early 2000's you could do the same with mutual funds at T.Rowe Price, Vanguard, etc. but they want $2500 to set up an account. One option is to build up a DRIP and then sell all or some shares and open a fund account.
Concerning global warming, as a believer, that is the least of MY worries as my God in Genesis 8:22 stated "while the earth remaineth, seedtime and harvest, and COLD and HEAT, and SUMMER and WINTER, and DAY and NIGHT shall NOT CEASE." ..........good enough for me
"I'm retired so the job market does not affect me directly."
What a piss poor attitude, you non-American. I am NOT retired and worked decades for small salaries tied to bonus structures. In all my years, I was never paid more salary than bonus! All that bonus income came from skill sets my employers didn't have and benefited from paying me for it. Today I own 2 businesses. I am fair to my customers, employees and myself-- so I don't have cheap labor, cheap goods and a financial windfall for my paper and button wrangling efforts... I just make a good living and pay fair taxes. Retirees have ZERO understanding of what's going on and need to start talking to and not at family members, instead of listening to commercial news. YOU were indentured at a time when Founders were around. Now we endure inheritors and Glass Ceiling corruption. IT HAS TO GO. You want to break union representation? Cap pay for non-Founders and have legally validated Performance Appraisals done by the Rank and File on the Middle Management. End At Will Employment and Corporate Boards. Let's eliminate the Veil of Anonymity and require a Designated Responsible Person in every entity. Founders had ethics, character and pride in their enterprises... today we don't even have enterprise.
"Believe that V_L is on the right track. Only I think it is the top 1% who elect our senators that have a big say in this matter The only way to cure it is to increase the tax rate ladders higher and take away all the loop holes in our tax laws."
Thanks! 63% of us Americans want a clean sweep of Congress. I, for one, want the Party of NO who pledged to their party rather than to honor the oath to their constituents-- to be purged of everything and banished to Katrina Trailers. Just WHO did these terrorists think they were? They are Treasonous BASTARDS now. Regardless of any shutdown resolution-- we know that these people did us wrong and that Wall Street BETS using DEBT monies, not conduct Exchanges based on business. Markets serve only greedy masters so hunt wealth down, crush them into the ground, create a new currency and actually make sure it stays in currency and not locked in markets and vaults doing bad things to regular people EVER AGAIN. If you oppose-- use your passport today and get to where you think other regular people will tolerate you. Good luck finding that place.
Obviously-- the 320+ point increase for the Dow today was total fear. Wall Street knows it's heading over the edge and doom is all they can see. That wasn't THEIR money, it was ours and we won't be seeing it back any time soon, but we'll know it intimately every tax time until our deaths.
The Exchanges don't work and neither do business platforms. The cost-- today was another TRILLION added on to the $632 TRILLION in derivatives already outstanding. Pretty soon you won't see 50% of your gross pay because another 20% of it will go toward taxes. Blame the top 5% in earners, they took it instead of trickling it down.
Obama declined the latest idiotic GOP offer. The entire 320+ Dow points were based on the "hope" of a resolution-- ignoring the nearly 400,000 NEW jobless benefit claims last week. It isn't getting better and NO party of NO pledgers are facing Impeachment. That means YOU are un-American or don't care or peck on your I-Phone pretending to ignore the obvious. Pretty sad.
"What's going to happen to utility stocks if it's decided that climate change is real, and is caused by the burning of fossil fuels?"
Climate change IS real. It IS caused by the burning of fossil fuels. We HAVE the ability to shift off them and there's no better time because we have an aged infrastructure and an idled on purpose fully capable workforce among the under and unemployed who would and could rebuild us without gas or oil dependency. Put the handheld devices down, kids... work to restore and recover FIRST, gratify yourself later.
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With the universe of this category in its seasonal sweet spot, these picks have tailwinds propelling them into the new year.
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