Defensive Investment in Utility Stocks Amid Economic Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: NASDAQ.COM
- Southern Company's Stability: As a $100 billion utility company operating for over a century and serving more than 9 million customers, Southern Company is an ideal investment during economic uncertainty, supported by its stable cash dividends and a 25-year history of increasing per-share dividends.
- Brookfield Renewable's Growth Potential: Brookfield Renewable achieved $6.4 billion in revenue and $712 million in net income last year, with a targeted annual dividend growth of 5% to 9%, showcasing strong long-term return potential that appeals to income-focused investors.
- Vistra's Innovative Strategy: By securing long-term power purchase agreements with major companies like Meta and Amazon, Vistra focuses on providing customized power solutions for the rapidly growing AI data center industry, with global electricity demand expected to grow by 27% by 2035, laying a solid foundation for future growth.
- Economic Environment Impact: Despite the threats of inflation and potential recession facing the U.S. economy, utility stocks like Southern Company, Brookfield, and Vistra offer relatively safe investment options that can maintain stable cash flows and dividends during economic downturns, attracting investors seeking defensive plays.
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Analyst Views on SO
Wall Street analysts forecast SO stock price to fall
17 Analyst Rating
4 Buy
11 Hold
2 Sell
Hold
Current: 92.520
Low
45.00
Averages
92.34
High
109.00
Current: 92.520
Low
45.00
Averages
92.34
High
109.00
About SO
The Southern Company is an energy provider. The Company owns three traditional electric operating companies, Southern Power Company and Southern Company Gas. The traditional electric operating companies-Alabama Power, Georgia Power and Mississippi Power-are operating public utility companies providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. The Southern Power Company develops, constructs, acquires, owns, and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates in the wholesale market. The Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas in four states - Illinois, Georgia, Virginia, and Tennessee, through the natural gas distribution utilities. Southern Company Gas is also involved in several other businesses that are complementary to the distribution of natural gas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Georgia Power Announces Rate Decrease Plan
- Rate Decrease Plan: The Georgia Public Service Commission has approved a rate reduction plan that will save typical residential customers approximately $50 annually, translating to $4.04 per month, resulting in total annual savings of about $285 million, significantly easing the financial burden on families and businesses.
- Agreement Background: This rate reduction stems from an agreement between Georgia Power and Public Interest Advocacy representatives, addressing two cases related to fuel cost recovery and storm cost recovery, aimed at effectively managing the costs of power generation and service restoration.
- Long-term Savings Commitment: Georgia Power has committed to providing an annual savings of $102 for typical residential customers by 2029, reflecting the company's strategic efforts to attract large-load customers and optimize the distribution of fixed costs, ensuring benefits for all customers.
- Customer Service Commitment: Georgia Power is dedicated to delivering reliable and affordable energy, maintaining rates below the national average for over 140 years, and helping customers save through flexible rate plans and energy-saving programs, further solidifying its leadership position in the industry.
See More
Georgia Power Elects Beth Lowry to Board of Directors
- New Board Member: Georgia Power has elected Beth Lowry to its board, who currently serves as CEO of Holder Construction Company, bringing over 30 years of industry experience that is expected to provide valuable insights into construction and development for the company.
- Industry Influence: Lowry began her career at Holder in 1994 and has held various leadership positions, demonstrating exceptional leadership particularly in sustainability and community engagement, aligning well with Georgia Power's core values.
- Educational Contributions: In 2022, she established the Lowry Family Scholarship at Kennesaw State University to support freshmen pursuing degrees in construction management, reflecting her commitment to education and economic mobility, thereby enhancing her community impact.
- Multiple Board Roles: In addition to her role at Georgia Power, Lowry serves on the boards of several organizations, including the Atlanta Police Foundation and the Georgia Chamber of Commerce, showcasing her extensive involvement in promoting economic and social development.
See More
Morgan Stanley Lowers Southern Company Target to $87
- Target Price Adjustment: Morgan Stanley analyst David Arcaro lowered the target price for Southern Company (NYSE:SO) from $92 to $87 while maintaining an Underweight rating, reflecting a cautious outlook on the utilities sector.
- Stable Dividend Yield: With an annual dividend yield of 3.22%, Southern Company is included among the 10 high-yield stocks for lasting retirement income, highlighting its appeal for stable income generation.
- Capital Expenditure Plan: The company has an $81 billion regulated capital expenditure plan expected to support 9% rate base growth through 2030, indicating strong demand visibility and growth potential.
- Market Performance Lag: Morgan Stanley noted that utilities lagged behind the S&P 500's performance during the month, indicating a lack of overall market confidence in the sector.
See More
Defensive Utility Stocks as Investment Strategy
- Rising Inflation Pressure: The U.S. inflation rate reached 3.8% last month, nearing a three-year high, which, despite the Federal Reserve's limited capacity for rate hikes due to economic fragility, has heightened investor interest in utility stocks as a defensive strategy.
- Southern Company's Stability: With a market cap of $100 billion and over 9 million customers, Southern Company stands out as a reliable investment during economic uncertainty, boasting a 25-year history of dividend increases and a projected yield of 3.2%, ensuring consistent cash flow.
- Brookfield Renewable's Growth Potential: Brookfield Renewable, with 48 gigawatts of production capacity, generated $6.4 billion in revenue and $712 million in net income last year, targeting dividend growth of 5% to 9% annually, making it attractive for income-focused investors seeking stability.
- Vistra's Growth Strategy: Vistra serves 5 million retail customers while focusing on powering the rapidly growing AI data center sector, with global electricity demand expected to double from 2024 to 2030; despite a low dividend yield of 0.58%, its growth potential has garnered strong buy ratings from analysts.
See More
Defensive Investment in Utility Stocks Amid Economic Concerns
- Southern Company's Stability: As a $100 billion utility company operating for over a century and serving more than 9 million customers, Southern Company is an ideal investment during economic uncertainty, supported by its stable cash dividends and a 25-year history of increasing per-share dividends.
- Brookfield Renewable's Growth Potential: Brookfield Renewable achieved $6.4 billion in revenue and $712 million in net income last year, with a targeted annual dividend growth of 5% to 9%, showcasing strong long-term return potential that appeals to income-focused investors.
- Vistra's Innovative Strategy: By securing long-term power purchase agreements with major companies like Meta and Amazon, Vistra focuses on providing customized power solutions for the rapidly growing AI data center industry, with global electricity demand expected to grow by 27% by 2035, laying a solid foundation for future growth.
- Economic Environment Impact: Despite the threats of inflation and potential recession facing the U.S. economy, utility stocks like Southern Company, Brookfield, and Vistra offer relatively safe investment options that can maintain stable cash flows and dividends during economic downturns, attracting investors seeking defensive plays.
See More
Georgia Power Expects Customer Savings in June
- Expected Customer Savings: Georgia Power anticipates that, pending approval from the Georgia Public Service Commission, typical residential customers could save approximately $4.04 monthly, translating to nearly $50 annually, thereby alleviating household energy costs and enhancing customer satisfaction.
- Promotion of Efficiency Resources: The company encourages customers to utilize free energy efficiency resources, such as LED bulbs and HVAC servicing, which help households effectively manage energy use during the summer heat, further reducing electricity expenses.
- Long-term Savings Commitment: With the influx of large customers, Georgia Power commits to providing annual savings of $102 for the typical residential customer by 2029, a promise that will help spread fixed costs across a broader customer base, protecting small businesses and residential customers.
- Customer Support and Assistance: Georgia Power collaborates with organizations like The Salvation Army to offer bill payment assistance and other resources, ensuring low-income families receive necessary support, reflecting the company's commitment to community responsibility.
See More
Georgia Power Announces Rate Decrease Plan
- Rate Decrease Plan: The Georgia Public Service Commission has approved a rate reduction plan that will save typical residential customers approximately $50 annually, translating to $4.04 per month, resulting in total annual savings of about $285 million, significantly easing the financial burden on families and businesses.
- Agreement Background: This rate reduction stems from an agreement between Georgia Power and Public Interest Advocacy representatives, addressing two cases related to fuel cost recovery and storm cost recovery, aimed at effectively managing the costs of power generation and service restoration.
- Long-term Savings Commitment: Georgia Power has committed to providing an annual savings of $102 for typical residential customers by 2029, reflecting the company's strategic efforts to attract large-load customers and optimize the distribution of fixed costs, ensuring benefits for all customers.
- Customer Service Commitment: Georgia Power is dedicated to delivering reliable and affordable energy, maintaining rates below the national average for over 140 years, and helping customers save through flexible rate plans and energy-saving programs, further solidifying its leadership position in the industry.
See More
Georgia Power Elects Beth Lowry to Board of Directors
- New Board Member: Georgia Power has elected Beth Lowry to its board, who currently serves as CEO of Holder Construction Company, bringing over 30 years of industry experience that is expected to provide valuable insights into construction and development for the company.
- Industry Influence: Lowry began her career at Holder in 1994 and has held various leadership positions, demonstrating exceptional leadership particularly in sustainability and community engagement, aligning well with Georgia Power's core values.
- Educational Contributions: In 2022, she established the Lowry Family Scholarship at Kennesaw State University to support freshmen pursuing degrees in construction management, reflecting her commitment to education and economic mobility, thereby enhancing her community impact.
- Multiple Board Roles: In addition to her role at Georgia Power, Lowry serves on the boards of several organizations, including the Atlanta Police Foundation and the Georgia Chamber of Commerce, showcasing her extensive involvement in promoting economic and social development.
See More
Morgan Stanley Lowers Southern Company Target to $87
- Target Price Adjustment: Morgan Stanley analyst David Arcaro lowered the target price for Southern Company (NYSE:SO) from $92 to $87 while maintaining an Underweight rating, reflecting a cautious outlook on the utilities sector.
- Stable Dividend Yield: With an annual dividend yield of 3.22%, Southern Company is included among the 10 high-yield stocks for lasting retirement income, highlighting its appeal for stable income generation.
- Capital Expenditure Plan: The company has an $81 billion regulated capital expenditure plan expected to support 9% rate base growth through 2030, indicating strong demand visibility and growth potential.
- Market Performance Lag: Morgan Stanley noted that utilities lagged behind the S&P 500's performance during the month, indicating a lack of overall market confidence in the sector.
See More
Defensive Utility Stocks as Investment Strategy
- Rising Inflation Pressure: The U.S. inflation rate reached 3.8% last month, nearing a three-year high, which, despite the Federal Reserve's limited capacity for rate hikes due to economic fragility, has heightened investor interest in utility stocks as a defensive strategy.
- Southern Company's Stability: With a market cap of $100 billion and over 9 million customers, Southern Company stands out as a reliable investment during economic uncertainty, boasting a 25-year history of dividend increases and a projected yield of 3.2%, ensuring consistent cash flow.
- Brookfield Renewable's Growth Potential: Brookfield Renewable, with 48 gigawatts of production capacity, generated $6.4 billion in revenue and $712 million in net income last year, targeting dividend growth of 5% to 9% annually, making it attractive for income-focused investors seeking stability.
- Vistra's Growth Strategy: Vistra serves 5 million retail customers while focusing on powering the rapidly growing AI data center sector, with global electricity demand expected to double from 2024 to 2030; despite a low dividend yield of 0.58%, its growth potential has garnered strong buy ratings from analysts.
See More
Defensive Investment in Utility Stocks Amid Economic Concerns
- Southern Company's Stability: As a $100 billion utility company operating for over a century and serving more than 9 million customers, Southern Company is an ideal investment during economic uncertainty, supported by its stable cash dividends and a 25-year history of increasing per-share dividends.
- Brookfield Renewable's Growth Potential: Brookfield Renewable achieved $6.4 billion in revenue and $712 million in net income last year, with a targeted annual dividend growth of 5% to 9%, showcasing strong long-term return potential that appeals to income-focused investors.
- Vistra's Innovative Strategy: By securing long-term power purchase agreements with major companies like Meta and Amazon, Vistra focuses on providing customized power solutions for the rapidly growing AI data center industry, with global electricity demand expected to grow by 27% by 2035, laying a solid foundation for future growth.
- Economic Environment Impact: Despite the threats of inflation and potential recession facing the U.S. economy, utility stocks like Southern Company, Brookfield, and Vistra offer relatively safe investment options that can maintain stable cash flows and dividends during economic downturns, attracting investors seeking defensive plays.
See More
Georgia Power Expects Customer Savings in June
- Expected Customer Savings: Georgia Power anticipates that, pending approval from the Georgia Public Service Commission, typical residential customers could save approximately $4.04 monthly, translating to nearly $50 annually, thereby alleviating household energy costs and enhancing customer satisfaction.
- Promotion of Efficiency Resources: The company encourages customers to utilize free energy efficiency resources, such as LED bulbs and HVAC servicing, which help households effectively manage energy use during the summer heat, further reducing electricity expenses.
- Long-term Savings Commitment: With the influx of large customers, Georgia Power commits to providing annual savings of $102 for the typical residential customer by 2029, a promise that will help spread fixed costs across a broader customer base, protecting small businesses and residential customers.
- Customer Support and Assistance: Georgia Power collaborates with organizations like The Salvation Army to offer bill payment assistance and other resources, ensuring low-income families receive necessary support, reflecting the company's commitment to community responsibility.
See More
