Recent Buy – Southern Company (SO)
This year has started off with a bang. We are just into the second month of the year and I have already made three buys! Here are links to my first two buys of the year; O and ABBV. Within the past few weeks, I am sure you have all noticed a correction in the market, finally! We are beginning so see some nice value. This has been a long time coming and long term dividend investors, like myself, dream of these moments. While everyone else is fearful and selling off, we take this opportunity to average down on existing positions or find a great entry point to add new positions to our portfolios. That is exactly what I did.
I started a new position with Southern Company (SO). “Southern Company is an American gas and electric utility holding company based in the southern United States.” Last week I bought 23 shares of SO.
Annual Dividend: $2.32
Years Paying/ Increasing: 16 years
Dividend increase from prior year: 3.4%
Payout Ratio: 78.4%
P/E Ratio: 79.54
SO has been on my watch list for a while now. My Utilities sector had been lacking from a diversification standpoint. Up until late last year, I only had ED in my portfolio. I ended up starting a position with D back in October. Now with this new addition of SO, that sector is becoming a little more well diversified. Still needs some work and to build up these existing positions, but this is a good starting point to build the foundation.
I don’t chase yield, but I would be lying if I said yield didn’t have anything to do with it. How often can you pick up a quality company at over 5% yield? Not too many. I see a few others took notice as well and jumped at the opportunity.
This purchase also comes at the perfect time, as its ex-dividend date was only a week or so away. Which means I will be able to see the dividend almost right away and receive it over the entire year. It should have a nice impact on dividend growth numbers going forward.
As shown above, SO has a dividend yield of 5.4% or $2.32 annually. This will add another $53.36 to my yearly dividend income. Broken down quarterly, it will add $13.34 per quarter.
Did you take advantage of the dip? What did you buy? What do you think of this buy? Do you like SO or do you currently own any? Anything you would prefer over it? What other companies are on your watch list right now? Comments are always welcome below.