NEE vs SO: Dividend Yield, Growth & Safety Comparison
Nextera Energy Inc (NEE) and Southern Co (SO) are both in the Utilities sector, making them natural rivals for dividend investors. SO edges ahead on yield at 3.22% versus NEE's 2.49%. For dividend growth, NEE leads with a 5-year CAGR of 10.2% versus SO's 2.9%. Both stocks carry a "Moderate" dividend safety rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | NEE | SO |
|---|
| Dividend Yield | 2.49% | 3.22% |
| Annual Dividend | $2.27 | $2.92 |
| 5-Year CAGR | 10.2% | 2.9% |
| Payout Ratio | 69% | 73% |
| Consecutive Years | 30 | 25 |
| Price | $93.81 | $94.53 |
Yield Comparison
Southern Co (SO) currently yields 3.22%, which is solid for the broader market. That's 0.72% more than Nextera Energy Inc (NEE), which yields 2.49%. In dollar terms, SO pays $2.92/share annually versus NEE's $2.27/share.
Dividend Growth
Over the past five years, NEE has grown its dividend at a 10.2% CAGR compared to SO's 2.9%. NEE: Dividend growth has been steady, with a 3-year CAGR of 10.1% and a 5-year CAGR of 10.2% (10-year: 11.2%). SO: Dividend growth has been steady, with a 3-year CAGR of 2.8% and a 5-year CAGR of 2.9% (10-year: 6.4%).
Dividend Safety
NEE's dividend safety is rated "Moderate." The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. SO's dividend safety is rated "Moderate." The payout ratio of 73% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. Both have similar payout ratios — NEE at 69% and SO at 73%.
Income Comparison
A $10,000 investment in SO generates approximately $322/year in dividend income, compared to $249/year from NEE — a difference of $73/year. At $100,000, that gap widens to $730/year.
Verdict
- Best for income: SO
- Best for growth: NEE
- Best for safety: NEE
Frequently Asked Questions
Which has a higher dividend yield, NEE or SO?
Southern Co (SO) has a higher dividend yield of 3.22% compared to Nextera Energy Inc (NEE) at 2.49%.
Is NEE or SO a better dividend growth stock?
Nextera Energy Inc has the stronger dividend growth with a 5-year CAGR of 10.2%, compared to Southern Co's 2.9%.
Which is safer for dividend income, NEE or SO?
Nextera Energy Inc's dividend safety is rated "Moderate" while Southern Co is rated "Moderate." The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. The payout ratio of 73% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
How much income does $10,000 in NEE vs SO generate?
A $10,000 investment in NEE generates approximately $249/year in dividends, while the same amount in SO generates about $322/year.
Is NEE or SO a Dividend Aristocrat?
Nextera Energy Inc is a Dividend Aristocrat (30 years) and Southern Co is a Dividend Aristocrat (25 years).
Which has a lower payout ratio, NEE or SO?
Nextera Energy Inc has a lower payout ratio of 69% compared to Southern Co's 73%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
NEE vs SO: which is better for retirement income?
It depends on your priorities. SO for current income, NEE for dividend growth, NEE for safety. Many retirement investors hold both for diversification.
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