By Ian Salisbury
One of the stock market's most exclusive clubs -- the so-called dividend aristocrats -- looks poised to get a new member. It's good news for investors looking for steady dividend payouts in an uncertain market.
Atlanta-based electric utility Southern Co. has paid and raised its dividend for 24 straight years. The latest dividend hike, which brought the payout to 74 cents from 72 cents, was announced last April -- a pattern the company has followed for at least the past five years.
Reached Thursday, a Southern spokesman declined to comment. But assuming Southern raises its payout again in the next few weeks, it looks set to qualify for the S&P 500 Dividend Aristocrats Index, which requires companies to consistently make and raise payouts for a quarter century. It's worth noting the S&P index only updates its constituents once a year, in late January, so the stock may have to wait a while longer for its official coronation.
Still, it's a rare honor. The current index includes just 69 names, including blue chips like Exxon Mobil, Johnson & Johnson, Caterpillar and Consolidated Edison. No additional members were added at the latest reconstitution in January 2026.
While all stock market milestones are by nature artificial, becoming an "aristocrat" is sure to draw Southern Co. additional attention. Investors love stocks with long track records of steady payouts through all kinds of economic conditions. The ProShares S&P 500 Dividend Aristocrats ETF, which tracks the group, has $11 billion in assets. It's delivered average annual returns of 9.8% over the past decade, lagging the market's 14.5% returns, but showing far less volatility.
Should you own Southern Co.? As a regulated utility, it's unlikely to match the tech industry's runaway gains, but investors should be able to count on total returns of roughly 10% this year and next, based on the company's dividend yields and estimated profit growth.
Shares of Southern Co. have already rallied 12% so far this year, as investors seek safety in utilities and other defensive stocks. It trades at 21 times 2026 earnings, which is high for utilities, which typically trade at around 19 times earnings.
Still, Wall Street analysts expect solid earnings growth of 6.2% in 2026 and 7.8% in 2027, according to FactSet. Add in Southern's 3.1% dividend yield and investors are looking at total returns of 9.3% to 10.9% in the next two years.
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 09, 2026 13:54 ET (17:54 GMT)
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