Southern Company: Has Paid 300 Consecutive Quarterly Dividends Equal to or Greater Than the Previous Quarter

Southern Company (NYSE: SO) is an energy company providing electric and gas service to nine million customers across the United States through its subsidiaries. The company is focused on making, moving and selling reliable, low-cost energy solutions from traditional and renewable power sources, as well as providing superior customer service. Recognizing the rapid evolution of the energy sector, including new technologies, customer preferences, and environmental, social, and governance initiatives, Southern Company is working to advance its solar, wind, and nuclear holdings, develop microgrids and significantly reduce its system’s greenhouse gas emissions.

  • Over 9 million customers across seven subsidiaries.
  • 300 consecutive quarterly dividends equal to or greater than those in the previous quarter (for 75 years)
  • Developing microgrids and deploying energy storage systems throughout the U.S.
  • Subsidiary Southern Power provides wholesale solar, wind, fuel cell and natural gas generation in 14 states
  • Subsidiary PowerSecure is the nation’s leading distributed energy innovation company

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Advisor Access spoke with Southern Company’s chairman, president and CEO, Tom Fanning, about the company’s business model, culture and plans for future growth.

Advisor Access: Let’s start with the basics. Please describe Southern Company’s core business and strategy.

Tom Fanning: Southern Company is a leading U.S. utility holding company serving 9 million customers through our various subsidiaries. We own and operate seven state-regulated electric and gas companies spanning six states and a competitive generation company that serves wholesale customers throughout the country.

The economies within our state-regulated service territories remain robust, with continued strong net migration trends and historic levels of economic development activity throughout the last year. Recent electric vehicle manufacturing plant announcements in Georgia from Hyundai and Rivian represent the largest expected job creation and investment in the state’s history, totaling over $10 billion in investment and 15,000 jobs expected to be created.

Across our state-regulated businesses, we differentiate ourselves through a customer-focused business model that is predicated upon delivering best in class operational performance and customer service levels at rates below the national average. This in turn supports longstanding constructive regulatory environments within each of our jurisdictions that enable sustained, robust investment across our businesses for the benefit of our customers. We plan to invest $41+ billion over the next five years on the continued transition to and maintenance of cleaner energy resources as well as further reliability and resiliency investment in our transmission and distribution systems. We believe the capital investment in our current forecast provides a solid foundation for our expected 5% to 7% sustainable long-term earnings per share growth rate.1

For more than a century, we have delivered the energy resources and solutions our customers and communities need to drive growth and prosperity. Further, we understand that meeting the requirements of our customers, our neighbors and our communities creates a special responsibility to look beyond our own self-interest. We must be bigger than our bottom line, be citizens wherever we serve and create an environment in which the communities that we serve are better off because we are there.

AA: A tagline for the company is “building the future of energy.” What does this mean for Southern Company and why is it important?

TF: For more than five decades, Southern Company’s world class research and development organization has remained on the forefront of innovation to not only meet the needs of our customers today but to anticipate the future needs of customers to help build the future of energy today. Our research portfolio spans technology development for energy production, storage, delivery and use, and is facilitating the transition to a net-zero energy future.

We also work to innovate through strategic partnerships with forward-thinking companies, government organizations and research institutions. In 2022, in partnership with Mitsubishi Power and the Electric Power Research Institute (EPRI), we successfully blended 20% hydrogen at one of our natural gas fired power plants, representing the world’s largest hydrogen fuel blending demonstration project to date on an advanced class gas turbine. This demonstration project will help pave the way for long-term clean and carbon-free use of existing natural gas generating infrastructure.

Additionally, in Alabama, Southern Company continues to manage the National Carbon Capture Center for the Department of Energy, which recently surpassed nearly 130,000 hours of testing and has expanded its focus on advancing natural gas power generation, carbon utilization and technology, and direct air capture.

At Southern Company, we maintain a commitment to real science and technology development. There is an entire portfolio of new ideas that we’re putting out there that I think will have a profound consequence in the future. We are proud of the legacy created by our R&D organization and look forward to continuing this important work for many years to come.

Likewise, the future of energy must be equitable and, at Southern Company we are confronting these issues head-on. As we transition to a clean energy future, we understand there will be potential opportunities and challenges for our workforce, communities and customers. Southern Company is committed to a Just Transition for our stakeholders. Moreover, we have created an equity framework that confirms our collective commitment to racial equity to help ensure all groups are well represented, included and fairly treated within all levels of the organization and that everyone feels welcomed, valued and respected. Increasing our cultural capabilities makes us better prepared to serve the needs of tomorrow. We are committed to be a role model among companies forging change.

AA: Southern Company’s Vogtle Units 3 and 4 will be the first new nuclear units built in the United States in more than three decades. Could you describe why this asset will be an important generation asset for customers for decades to come?

TF: We are in the final innings of construction and start-up at Plant Vogtle Units. When completed,  these Units will provide a clean, safe, reliable and cost-effective source of electricity that will provide stable prices and improve Georgia’s communities for generations to come.

AA: Southern Company has a very robust capital investment plan over the next several years. Could you talk a little bit about what you are investing in?

TF: Southern Company’s $41 billion capital investment plan supports our long-term 5% to 7% earnings per share growth objective1 and is primarily composed of regulated investment, with over 95% of investments being made through our seven state-regulated electric and gas subsidiaries. The majority of these investments will support increased resilience and smart grid investment on the transmission and distribution systems—the “hardening” of our system—at our electric utilities, and pipeline replacement and improvement programs at our state-regulated gas companies. Further, we continue to believe that our competitive generation business has significant opportunity to grow through clean energy infrastructure across the U.S., which would represent incremental investment above our $41 billion forecast.

AA: Southern Company has paid a remarkable 300 consecutive quarterly dividends that have been equal to or greater than the previous quarter. Can you talk a bit about why the dividend is so important to Southern Company?

TF: This year represents our 21st consecutive annual dividend increase, and for 75 years—dating back to 1948—Southern Company has paid a dividend that was equal to or greater than that of the previous year. We have never decreased our dividend. This is a record that we are very proud of.

When you look at Southern Company’s value proposition, we pride ourselves on maintaining a high degree of financial integrity and strong investment grade credit ratings coupled with regular, predictable and sustainable earnings per share and dividend growth. This supports our objective of providing superior risk-adjusted total shareholder return to investors over the long term. People invest in Southern Company because it has been a safe, predictable investment that they can hold onto for a long time. And why is that important? When you have that type of investment, the compounding effect of the dividends every year is enormous. Over 70% of Southern Company’s total shareholder return over the last 20 years has come from the dividend.

AA: The energy mix of your portfolio has evolved dramatically over the last decade. Can you describe what has changed and what you expect to occur over the next decade?

TF: Our generation portfolio has seen a drastic transformation over the past decade as our fleet has transitioned from coal to natural gas and renewable generation. In 2022, electric generation from coal represented approximately 20% of our total generating mix—down from nearly 70% of our generating mix in 2007.

Our goal at Southern Company is to provide clean, safe, reliable and affordable energy to the customers that we have the privilege to serve. We work with regulators within each of our system’s jurisdictions to perform long-range generation planning in support of that goal.

The decision to reduce generation from coal-fired power plants—and to retire coal plants in some cases—is made within the state regulatory framework for each of our subsidiary utilities. Along with a quantitative economic review, we also consider other qualitative factors, such as fuel diversity, impacts to local communities, and operational flexibility, when making major generation decisions. We continue to reduce the number of generating units in our coal fleet as we have proposed to have just eight coal units remaining in our generating fleet by the end of 2028 (down from 66 coal units in 2007), and we expect to further reduce our coal fleet in the 2030s, pending regulatory approval.

We have also set a goal to reduce greenhouse gas emissions 50% by 2030 (and expect to sustainably reach that goal prior to 2030) and to achieve net zero greenhouse gas emissions by 2050 from 2007 levels. These goals are a continuation of our trajectory of lower carbon emissions over the past decade. I am confident that we are prepared and well-positioned to meet the needs of customers well into the future and to succeed in this transition to a low-carbon future.

AA: Southern Company’s subsidiaries consistently rank among the top of the industry with regards to customer satisfaction. Georgia Power, Southern Company’s largest electricity subsidiary, was just ranked #1 for business satisfaction in its segment by J.D. Power. Would you tell us about the company’s emphasis on customer satisfaction?

TF: Our pledge to put the customer at the center of everything we do is the key to our success. I like to frame our day-to-day actions in two ways—the whats and the hows. At Southern Company, our whats are the things we do every day to make, move and sell energy in a reliable, low-price manner with some of the best customer service in the U.S. But the whats alone are not enough.

As important, and potentially more powerful, than what we do in life is how we do it. Southern Company’s culture revolves around what we have termed Our Values: Safety First, Unquestionable Trust, Superior Performance and Total Commitment.

We know that our culture—not rules and procedures—drives our behavior. It sets an institutional guidepost, a common set of principles, a common set of expected behaviors that define how we should interact with each other. Furthermore, we believe that we need to be leaders in improving the human condition. Making a difference on a personal level, touching people’s hearts in a positive way. These are the things that propel any enterprise forward and create sustaining value.

AA: Is there anything else you’d like investors to know about Southern Company?

TF: The energy sector is rapidly evolving, driven by innovation, technology advancements, customer preferences, resiliency efforts and environmental, social, and governance initiatives. With evolution comes tremendous opportunity, and Southern Company, with our customer-centric business model, is well poised to provide continued value to our customers and communities in this changing landscape.

We recognize that innovation and technological progress are fundamental to the advancement of society and that change is inevitable. So, we choose to actively engage in the future. Sure, some will ignore it or spend their resources attempting to prevent inevitable change from happening. Instead, we have made a promise not only to prepare for and respond to what the future will bring, but more than that, to embrace change and take action to ensure we will be the leaders who influence the future, who continue to serve our customers and who ensure that those advances improve the quality of life for all.

That is why we are so excited about the future of Southern Company.

AA: Thank you, Tom.

1Long-term guidance is provided as of February 17, 2022.

Thomas A. (Tom) Fanning is chairman, president and chief executive officer of Southern Company, America’s premier energy company. Elected to the board of directors in July 2010, he became president of Southern Company in August 2010, and assumed the additional responsibilities of chairman and CEO in December 2010. He has worked for Southern Company for more than 38 years and has held 15 different positions in eight different business units, including numerous officer positions with a variety of Southern Company subsidiaries in the areas of finance, strategy, international business development and technology. Fanning is co-chair of the Electricity Subsector Coordinating Council, which serves as the principal liaison between the federal government and the electric power sector to protect the electric grid from threats that could impact national security, including cyber and physical terrorism as well as natural disasters. His leadership was recognized by the U.S. Senate with an appointment to the Cyberspace Solarium Commission, a group tasked with developing a protection strategy for the cyberspace interests of the United States. Furthermore, the Cybersecurity and Infrastructure Security Agency (CISA) has appointed Fanning as chair of the agency’s newly formed Cybersecurity Advisory Committee where he leads a group providing recommendations on the development and refinement of CISA’s cybersecurity programs and policies. Fanning earned bachelor’s and master’s degrees in industrial management and also was awarded an honorary Doctor of Philosophy degree from Georgia Tech. His executive education includes programs at the International Institute for Management Development in Lausanne, Switzerland, Harvard Business School and the University of Virginia Darden School of Business. Fanning lives in Atlanta with his wife, Sarah, and has four children.


In December 2022, Southern was named one of the top 23 highest conviction calls for 2023 by UBS across all sectors in the firm’s coverage universe. Southern was the only utility company to make the list. UBS lead utility analyst Ross Fowler justified his strong ‘buy’ conviction stating, “The Vogtle risk premium in shares should wane and the market should begin to apply historical premiums to SO prior to new nuclear construction issues for 1st quartile regulation, 1st quartile EPS growth, and management execution quality. As fleet transformation occurs, an additional premium to historical levels is likely as a result of an improving clean energy profile.”

“We are upgrading SO to Outperform because we see the stock reaching a premium multiple in 2023, as investors look for names with a strong balance sheets and regulatory certainty. A major milestone in 2023 is the commercial operation of Vogtle Unit3—the first of two new nuclear units at Vogtle—and potentially Unit4 by year-end 2023. SO stock trades at a half-turn discount to peers. We think it can trade closer to low-risk, high quality names, which are 1-2x higher than the 2025E group avg of 16.5x.”

—Steve Fleishman, Wolfe Research

“In our view, the post-Vogtle growth profile should accelerate on fleet transformation opportunities to achieve SO’s 2050 net zero carbon emissions goal. We expect both Vogtle nuclear units moving to in-service rate base will generate cash of $600-$700mln. The Vogtle risk premium in shares should wane and the market should begin to apply historical premiums to SO prior to new nuclear construction issues for 1st quartile regulation, 1st quartile eps growth, management execution quality. Southern traded at an average 17% premium to the average regulated utility (prior to new nuclear construction). As fleet transformation occurs, an additive premium to historical levels is likely, as a result of an improving ESG profile.”

—Ross Fowler, UBS

“With the Vogtle 3 nuclear fuel load now complete, the Company has achieved a major milestone in the process, indicating that the startup of the Unit 3 is imminent. We believe that this should bring a significant relief to investors who watched the plant’s challenging construction process over the last decade. With Vogtle overhangs diminishing, we believe that SO management will be freed up to focus on proactive portfolio management and LT growth targets.”

—Sophie Karp, Keybanc Capital Markets

“Investors as a whole are finally starting to think beyond Vogtle. With one of the strongest regulatory backdrops in the country (GA, AL, and MS) and ~$700m of cash flows unlocking as Vogtle comes online, the debate around SO is fast becoming its future rather than its present. We see material value with shares. . . .In our view, post-Vogtle, Southern should eventually be valued as a premium utility. There are few jurisdictions in the country in which utility regulators seem to manage to strike the right balance between delivering for ratepayers as well as for investors. The Commissioners we met with were focused on ratepayer bills; however, they also believe the return afforded to the utility should reflect its reputation for reliability (Georgia Power has historically had a strong historical J.D. Power ranking in the South). Between Georgia, Alabama, and Mississippi, Southern operates in some of the strongest regulatory backdrops in the country, jurisdictions that we believe compare favorably with the likes of Wisconsin, Iowa, Michigan, Florida, and Texas. While utilities in these jurisdictions trade at premiums to their peers, Southern has been held back by Vogtle 3 & 4 and the execution delays that have accompanied the project’s construction. That construction phase is drawing to a close, and, in our view, investors should be focused prospectively on what seems to be one of the strongest regulatory backdrops we have seen across the US.”

—Shar Pourreza, Guggenheim Securities


The material, information and facts discussed in this report are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. This is not an offer or solicitation of the securities discussed. Advisor-Access LLC and/or its employees, contractors and owners, may purchase or sell the securities mentioned in this report from time to time. Any opinions or estimates in this report are subject to change without notice. Certain information contained in this report is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, expected long-term earnings per share growth rate, financial objectives, economic outlook, planned investments and expected completion of ongoing construction projects. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, including tax, environmental and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; the potential effects of the continued COVID-19 pandemic; the extent and timing of costs and legal requirements related to coal combustion residuals; current and future litigation or regulatory investigations, proceedings, or inquiries, including litigation and other disputes related to the Kemper County energy facility and Plant Vogtle Units 3 and 4; the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company’s subsidiaries operate, including from the development and deployment of alternative energy sources; variations in demand for electricity and natural gas; available sources and costs of natural gas and other fuels and commodities; the ability to complete necessary or desirable pipeline expansion or infrastructure projects, limits on pipeline capacity, and operational interruptions to natural gas distribution and transmission activities; transmission constraints; effects of inflation; the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Units 3 and 4 (which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale) and Plant Barry Unit 8, due to current and/or future challenges which include, but are not limited to, changes in labor costs, availability, and productivity, challenges with management of contractors or vendors, subcontractor performance, adverse weather conditions, shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor, contractor or supplier delay, delays due to judicial or regulatory action, nonperformance under construction, operating, or other agreements, operational readiness, including specialized operator training and required site safety programs, engineering or design problems or any remediation related thereto, design and other licensing-based compliance matters, including, for Plant Vogtle Unit 4, inspections and the timely submittal by Southern Nuclear of the Inspections, Tests, Analyses, and Acceptance Criteria documentation for each unit and the related investigations, reviews and approvals by the U.S. Nuclear Regulatory Commission (“NRC”) necessary to support NRC authorization to load fuel, challenges with start-up activities, including major equipment failure or system integration, and/or operational performance; and challenges related to the COVID-19 pandemic; the ability to overcome or mitigate the current challenges at Plant Vogtle Units 3 and 4, that could further impact the cost and schedule for the project; legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Units 3 and 4 and Plant Barry Unit 8, including Public Service Commission approvals and Federal Energy Regulatory Commission and NRC actions; under certain specified circumstances, a decision by holders of more than 10% of the ownership interests of Plant Vogtle Units 3 and 4 not to proceed with construction; the ability of certain other Vogtle owners to tender a portion of their ownership interests to Georgia Power following certain construction cost increases, including the purported exercises by Oglethorpe Power Corporation and the City of Dalton of their tender options and related litigation; in the event Georgia Power becomes obligated to provide funding to Municipal Electric Authority of Georgia (“MEAG Power”) with respect to the portion of MEAG Power’s ownership interest in Plant Vogtle Units 3 and 4 involving Jacksonville Electric Authority, any inability of Georgia Power to receive repayment of such funding; the ability to construct facilities in accordance with the requirements of permits and licenses (including satisfaction of NRC requirements), to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; investment performance of the employee and retiree benefit plans and nuclear decommissioning trust funds; advances in technology, including the pace and extent of development of low- to no-carbon energy and battery energy storage technologies and negative carbon concepts; performance of counterparties under ongoing renewable energy partnerships and development agreements; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to return on equity, equity ratios, additional generating capacity, and fuel and other cost recovery mechanisms; the ability to successfully operate the electric utilities’ generation, transmission, and distribution facilities, Southern Power Company’s generation facilities and Southern Company Gas’ natural gas distribution and storage facilities and the successful performance of necessary corporate functions; the inherent risks involved in operating and constructing nuclear generating facilities; the inherent risks involved in transporting and storing natural gas; the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due and to perform as required; the ability to obtain new short- and long-term contracts with wholesale customers; the direct or indirect effect on the Southern Company system’s business resulting from cyber intrusion or physical attack and the threat of physical attacks; interest rate fluctuations and financial market conditions and the results of financing efforts; access to capital markets and other financing sources; changes in Southern Company’s and any of its subsidiaries’ credit ratings; the replacement of LIBOR with an alternative reference rate; the ability of Southern Company’s electric utilities to obtain additional generating capacity (or sell excess generating capacity) at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest, wars or other similar occurrences; the direct or indirect effects on the Southern Company system’s business resulting from incidents affecting the U.S. electric grid, natural gas pipeline infrastructure, or operation of generating or storage resources; impairments of goodwill or long-lived assets; and the effect of accounting pronouncements issued periodically by standard-setting bodies. 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