Stock of the Day

February 16, 2022

Southern (SO)

$88.46
+$0.64 (+0.7%)
Market Cap: $96.22B

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations. In addition, it owns and operates nuclear, coal, hydro, cogeneration, solar, wind, battery storage, and fuel cell facilities. Further, the constructs, operates, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.9 million electric and gas utility customers. Further, it develops distributed energy and resilience solutions; deploys microgrids for commercial, industrial, governmental, and utility customers; and offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

Southern Bull Case

Here are some ways that investors could benefit from investing in The Southern Company:

  • The Southern Company offers a solid annual dividend of $2.88, translating to a dividend yield of 3.36%. This can provide a steady income stream for investors, especially those seeking income-generating investments.
  • The current stock price is approximately $86.00, which is relatively stable and reflects investor confidence in the company's operations and future prospects.
  • Recent analyst upgrades, such as Scotiabank raising the target price to $98.00, indicate positive sentiment and potential for price appreciation, suggesting that the stock may outperform the market.
  • The company has a manageable dividend payout ratio of 66.98%, which means it retains a significant portion of its earnings for reinvestment, indicating financial health and the ability to sustain dividends.
  • With a consensus rating of "Hold" from analysts, there is a balanced outlook on the stock, suggesting that it may be a stable investment option in the current market environment.

Southern Bear Case

Investors should be bearish about investing in The Southern Company for these reasons:

  • Insider selling activity, such as the CEO selling 14,540 shares, may raise concerns about the company's future performance and could signal a lack of confidence from those within the company.
  • Analysts have mixed ratings, with one sell rating and several hold ratings, indicating uncertainty about the stock's potential for significant growth in the near term.
  • Recent downgrades from firms like Guggenheim, which lowered their rating from "buy" to "neutral," suggest that some analysts are cautious about the stock's future performance.
  • The stock's performance may be affected by broader market conditions, and with a target price consensus of $89.79, there may be limited upside potential compared to other investment opportunities.
  • The company's reliance on dividends may limit its ability to reinvest in growth opportunities, which could impact long-term capital appreciation for investors.

Best Solar Energy Stocks to Invest in This Year

Written By Melissa Brock on 1/26/2022

During the past 10 years, solar has experienced an average annual growth rate of 42%. The reasons? You can point to federal policies like the Solar Investment Tax Credit, cheaper rates for solar panels and, simply, increasing demand. According to the Solar Energy Industries Association, the United States has more than 100 gigawatts (GW) of solar capacity installed, enough to power 18.9 million homes

The state of California mandated that new single-family homes and multi-family dwellings up to three stories high must include solar panels starting in 2020. A second mandate also requires commercial buildings to have solar panels and battery storage.

Why not take advantage of the here-to-stay trend involving clean energy? Let's find out how you can invest in stocks. 

What is Solar Energy and Why Invest in It?

What is solar energy, anyway, and why would you want to invest in it? Solar energy uses the sun's light and heat to generate renewable power. Solar panels offer the most common form of solar energy, which means they absorb photons, or particles of light, with photovoltaic (PV) cells. Solar panels generate direct current (DC) energy and then convert it to usable alternating current (AC) energy, which then flows through the home's electrical panel.

The future of energy investment incorporates clean and green energy and incorporates wind, water and solar energy. This rapidly advancing industry can be a big moneymaker for you.

How Can You Invest in the Solar Industry?

You can invest in more than just solar panels — there are opportunities all along the solar energy supply chain. You might consider investing in raw material production, wafer manufacturing, solar cell modules and panels or the companies that install them, for instance.

You might also think outside the supply chain and instead, invest in certain companies that use solar extensively. Here are some companies that use solar/renewable energy extensively, according to the Climate Reality Project.

So many other companies invest in solar power. If it's important to you, do your research prior to investing so you know whether the companies you invest in leave a smaller footprint.

Best Solar Stocks to Invest in This Year

Let's take a look at a few stocks to consider investing in. 

Brookfield Renewable Partners LP (NYSE: BEP)

Brookfield Renewable Partners LP owns a portfolio of renewable power generating facilities in North America, Colombia, Brazil, Europe, India and China through hydroelectric, wind, solar, energy transition (generation, pumped storage, cogeneration and biomass distribution) and corporate. 

Renewable reported funds from operations (FFO) of $210 million or $0.33 per unit for the three months ended September 30, 2021, a 32% increase from the prior year. The company's assets continue to perform well with high levels of asset availability and new acquisitions.

The company had approximately 1,300 gigawatt hours (GWh) of renewable generation, 8,000 megawatts of development projects through construction and advanced stage permitting and approximately $2.4 billion ($600 million net to Brookfield Renewable) of equity across a range of transactions year-to-date. 

ReneSola Ltd. (NYSE: SOL)

ReneSola Ltd. manufactures solar wafers and modules and has several segments, including wafer (manufacture and sales of monocrystalline and multicrystalline solar wafer and processing services), cell and module (creation and sales of PV cells and modules) and solar power projects (development and electricity). 

Gross profit was $6.1 million in the third quarter of 2021, yielding a gross margin of 39.2%. Gross profit and margin compare to a gross profit of $11.3 million and gross margin of 61% in the second quarter of 2021.

Net income attributed to ReneSola Power common shareholders was $0.7 million. Cash flow used in operating activities was $5.1 million. Cash and equivalents were $275.8 million, compared to $286.0 million at the end of Q2 2021 and total current assets were $351.2 million, compared to $357.1 million in Q2. 

First Solar Inc. (NASDAQ: FSLR)

First Solar Inc. designs, manufactures, markets and distributes PV solar power systems (including development, construction, operation and maintenance of photovoltaic solar power systems) and solar modules (including the design, manufacture and sale of cadmium telluride solar modules, which convert sunlight into electricity). 

Net sales for the third quarter were $584 million, a decrease of $46 million from the prior quarter, mainly due to lower systems segment revenue. Operating income for the third quarter was $51 million. Net income per diluted share for the third quarter was $0.42, compared to $0.77 in the prior quarter.

Cash, cash equivalents, restricted cash, and marketable securities at the end of the third quarter totaled $1.9 billion, a decrease of $111 million due to capital expenditures and reinvestment of restricted cash.

It's one of the most profitable companies in solar and is now back in growth mode, so long-term investors may want to consider it.

Consider Solar Long-Term

Ready to invest in solar? Consider investing in certain solar companies for long-term success. Solar isn't going anywhere, and as solar becomes more sophisticated, you're only going to see more innovation as time goes on.

Recent News