Southern Co. raises dividend to boost implied yield above 3.5%

Shares of Southern Co.
SO,
+0.81%
rose 0.1% in afternoon trading Tuesday, after the electric and gas distribution company said its quarterly dividend was being raised by 3.0%, to boost the dividend yield above 3.5%. The new quarterly dividend of 68 cents a share, up from 66 cents, will be payable June 6 to shareholders of record on May 16. Based on current stock prices, the new annual dividend rate implies a dividend yield of 3.58%, compared with the yield for the SPDR Utilities Select Sector ETF
XLU,
+0.84%
of 2.65% and the implied yield for the S&P 500
SPX,
+0.25%
of 1.42%. Southern said it has now raised its dividend for 21-straight years. “Today’s action by the board reinforces our objective to provide regular, predictable, sustainable earnings-per-share and dividend growth supported by premier state-regulated utilities and energy infrastructure under long-term contracts,” said Chief Executive Thomas Fanning. Southern’s stock has rallied 16.9% over the past 12 months, while the utilities sector ETF has advanced 13.4% and the S&P 500 has gained 6.8%.