12 Best Electric Utility Stocks to Buy Now

5. The Southern Company (NYSE:SO)

Number of Hedge Fund Investors: 53

The Southern Company (NYSE:SO) is one of the largest utilities in the United States, making it one of the Best Utility Stocks. The company provides natural gas distribution utilities in four states and vertically integrated electric utilities in three states to its 9 million consumers. Its 50 gigawatts of rate-regulated producing capacity is mostly used to supply Georgia, Alabama, and Mississippi customers. It is a subsidiary that sells power mostly under long-term contracts and has 13 gigawatts of renewable energy and natural gas-producing facilities across the United States.

The Southern Company (NYSE:SO) reported significant earnings growth, with adjusted EPS at the top of its target range, growing 11% from 2023. The firm had substantial growth in both residential and commercial markets, adding 26,000 natural gas distribution customers and 57,000 new residential electric customers, while commercial sales surged 17% year over year. A substantial capital investment plan of $63 billion over the next five years was also revealed by it, of which 95% will go to state-regulated utilities. This is a $14 billion jump over the prior estimate.

Its southeastern area continues to see strong economic development, with more than 150 businesses growing their operations to support 20,000 new jobs and a possible 50,000 megawatt load increase by the mid-2030s. The company’s long-term perspective remains optimistic, as it reaffirms its estimated adjusted EPS growth rate of 5% to 7%, with possible performance falling close to the upper end of this range.

Mizuho raised the The Southern Company (NYSE:SO) price objective from $85 to $90. According to the analyst, the company’s updated expenditure strategy is likely to drive 7% rate-base growth, up from 6% previously. Although the company considers the update to be encouraging, it still believes the shares are valued reasonably.