Southern Company (SO)

[Timothy Smith]

Well, I believe in owning a mix of things. I think you don’t want to have all in one particular sector, particularly if you’re investing for income. Again, you have to stick around.

So I would take a look at some of the utilities out there. Southern Company (SO), for example, a big power utility in the Southeast.

A lot of these companies have been thought of as interest-rate sensitive in the past. They’re pretty much economic-growth sensitive. The formula for growth for utilities is capital spending plus favorable regulation equals higher cash flow, higher dividends, and a higher share price.

This one has it, I think, made for that. Again, a very stable part of the country that continues to grow. It now looks like their nuclear power plant, the Vogtle additions there are going to get the relicensing by the end of the year, so that’s a big capital investment. It’s going to go through into earnings, dividends, and share price.

So again, a very nice addition. You put those two in your portfolio, you’re not going to be sorry.

Do you own either or both of those personally or professionally?

I do own professionally both of them. I own Southern Company from my own account. I have for about 20 years now.

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