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Recent Buys

Recent Buy – Southern Company (SO)

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.

 

SO Stats
Annual Dividend: $2.32
Yield: 5.4%
Years Paying/ Increasing: 16 years
Dividend increase from prior year: 3.4%
Payout Ratio: 78.4%
P/E Ratio: 79.54
EPS: $0.56

 

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.

 

27 Comments

    1. REITs and Utilities sectors were getting hit hard before the correction. That just made the value even greater. There are a lot of utilities I like. Currently own ED, D, and SO. Also have my eye on DUK. Utilities tent to have nice higher yields, but the growth rate typically isn’t as high as some other sectors. Smart to double down on O. I picked up some in January but the price is even better now than it was then. Perfect time to buy looks like for you.

  1. Excellent purchase, DD. The stock is significantly undervalued, which is one of the reasons why is current dividend yield is so high. My portfolio is also underweight in utilities, and I have been building up positions in D and the DUK. SO is next on my list, but I am currently lacking capital. Keep up the good work!

    1. Lacking capital is always the problem it seems. Picked up some D late last year and so far, I am loving that purchase. High dividend growth rate for a utility. DUK is also on my watch list for future purchases. Hope you are able to come up with some capital to take advantage of this opportunity.

    1. I missed the mark a little bit still but no one can time the market. Limit order for $43 and I think it just dipped below that price for a hot second afterward. Been going up since that though so not sure if it will go too much lower if any. Always love seeing dividends pay out and/or increased dividends as soon as you buy a company. Looking forward to it!

  2. Hoping I could pick a few more shares of SO right before ex-div. O is getting cheaper and there seems to be increasing short interest. DUK is a good choice as well. Too many good choices man.

    1. Too many choices! Still got a few days to go and looks like today SO is down again. I was debating picking up some more O as well, but don’t think that will be possible right now. DUK has also been on the buy list. No bad way to go about it as long as you are taking advantage of the correction somehow.

    1. I think they can leverage their debt good enough to keep their dividend safe and enough cash flow to keep it growing for now.

  3. Hi Daze. SO is a good buy at Utilities. One of best yields and normal leveraged. Dividends growth looks a bit low tough, but id you incest in company paying 1.something% they will have to increase the dividends more then 3-4x just to catch up with SO. Keep up the good work 🙂
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    1. Yeah that seems to be most utilities, Higher than average yields, but lower than average growth rates. Just the nature of the business I guess. But it is good to have both high yield and high growth companies in your portfolio. Just another way to diversify. Glad you like the buy.

    1. AAPL is a good stock in my opinion. The yield is low but the dividend growth rate it high. And they have more than enough cash on hand to cover their dividend for a long time. Pretty safe bet to me for now. Nice add.

    1. I like seeing everyone in the community take advantage of this dip as well. Did you make any buys while the market is down?

    1. Thank DH! I have been. Might as well do it while the capital is there. Should help with the growth over the year as well. D was my last Utility purchase. I’ll probably hold off on the Utilities sector for a little while now. Thanks for stopping by and commenting!

  4. Hello Daze! I picked up some more JNJ for my collection last week during the turmoil. Looking to make another purchase early next week. Haven’t decided on what to get yet however. Hopefully I can find some sales still by then. Take care!

    1. I like that buy. JNJ is always a solid choice. I would like to start a position with them myself but capital is limited and those shares get pricey. What is next up on your purchase list?

    1. The price was still pretty good before the correction. Utilities and REIT sectors getting hit pretty hard. The correction just made the price all that much better. AT least you were able to pick some up. Great long term hold.

    1. Happy to be fellow share holders with you on these great companies. I have been getting pretty lucky so far this year on dividend increases. ABBV was one, and I had one more that increased as soon as I bought it. Just wish I had more capital to put into it. ABBV has been doing great this year so far. Hope it continues. Cheers!

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