>>>The Southern Company
A safe retirement entails knowing there will be money coming in like clockwork, and the utilities sector is one of the best sectors for dividend income because these companies are so predictable.
All the better if the utility serves a growing population with a diverse array of energy resources. That is where The Southern Company stands out. The energy sources are diverse with 33 hydroelectric and 32 fossil fuel generating plants, 16 solar farms, and 1 each wind, biomass and landfill. They are the largest utility serving the vibrant states of Alabama, Georgia, Florida and Mississippi. These are areas where retirees are migrating.
The Federal Energy Regulatory Commission (FERC) regulates the sale and prices of energy sold between Southern Company and other utilities. The right to operate a utility within its service market and the prices charged are regulated the various Public Service Commissions in each state.
Alternative sources like solar and wind supplied by other, non-regulated entities give customers a choice of supply. Thus far there have been enough cost advantages to create a meaningful threat. Rather, companies like The Southern Company has bought or built sources of alternative energy.
Southern Company has paid dividends continuously since 1948, a record that qualifies the company as one of the most reliable dividend-paying stocks in the market. Over the past decade, dividends have grown at a 3.6% average annual rate and 3.1% over the past five.
Effective May 12, the annual payout was raised 6.6% to $2.24 per share. The payout ratio for 2015 was 83% but will drop to 79% based on consensus estimates for 2016 per share profits. A record $7 billion in capital spending in 2015 shows there are good opportunities to invest capital and once this pays off the company's 2.2% historic rate of earnings according to consensus estimates will tick up to 3.3% with dividend growth very likely to match.