What is your outlook for interest rates? if they go higher how much? do you think the economy has improved for the fed to increase it? If you are not a believer that the fed will raise interest rates over 2% then utilities stocks still have value in owning. Gordon Pape examined Southern Company.

Southern Company is based in Atlanta and is the second largest energy utility in the US. It serves 9 million electric and gas customers through 4 states, natural gas distribution in 7 states and is a provider of fibre optics and wireless communication. It typically trades between 46 and 54 and is trading around 49 with a price to earnings ratio of 18, while the S&P 500 as a comparison is 25.

In the third quarter operating revenue was $6.3 billion compared to $5.4 billion the year before at the same time the company had 3rd quarter earnings of $1.1 billion compared with $1 billion in 2015.

The dividend is $2.24 a year to yield 4.6%  and since 2000 the company has increased its payout every year.

Linking to dividend paying stocks, utility stocks generally will not increase your capital gain, but they will and can provide a safe secure dividend which means if you buy the company when the stock is depressed, you gain a better yield than at the bank. Over time, the dividends and the company share will tend to increase and you will have followed the rule do not lose money in investing.

There are more questions than answers, till the next time – to raising questions.