The Southern Company’s Future Outlook

The Southern Company, one of the largest regulated utilities in the United States, has had a tumultuous decade. The company has been focused on growing its dividend at a rate of roughly inflation to conserve cash. However, this period has been overshadowed by a massive capital investment project, Vogtle.

In 2023, The Southern Company brought Vogtle Unit 3 online, marking a significant milestone. The completion of Vogtle Unit 4, which is expected to be online in early 2024, will bring an end to this capital-intensive project. This will result in less money going out the door and the generation of cash flow from the two new units, estimated to be around $700 million.

With the completion of Vogtle, The Southern Company is expected to shift its focus from maintaining the buying power of its dividend to growing the dividend in line with earnings. This shift is likely to result in a growth rate of around the mid-single digits, a significant increase from the low single-digit growth rate experienced in the past decade.

In conclusion, The Southern Company’s future outlook appears promising. The completion of the Vogtle project will bring an end to the capital-intensive period and allow the company to focus on growing its dividend. Investors can expect a shift in the dividend trajectory, with a higher growth rate in the mid-single digits.