SO vs SRE: Dividend Yield, Growth & Safety Comparison
Southern Co (SO) and Sempra (SRE) are both in the Utilities sector, making them natural rivals for dividend investors. SO edges ahead on yield at 3.22% versus SRE's 2.85%. For dividend growth, SRE leads with a 5-year CAGR of 4.1% versus SO's 2.9%. Both stocks carry a "Moderate" dividend safety rating. SO is a Dividend Aristocrat while SRE is a Dividend Contender.
Key Metrics Comparison
| Metric | SO | SRE |
|---|
| Dividend Yield | 3.22% | 2.85% |
| Annual Dividend | $2.92 | $2.56 |
| 5-Year CAGR | 2.9% | 4.1% |
| Payout Ratio | 73% | 79% |
| Consecutive Years | 25 | 15 |
| Price | $94.53 | $94.71 |
Yield Comparison
Southern Co (SO) currently yields 3.22%, which is solid for the broader market. That's 0.37% more than Sempra (SRE), which yields 2.85%. In dollar terms, SO pays $2.92/share annually versus SRE's $2.56/share.
Dividend Growth
Over the past five years, SRE has grown its dividend at a 4.1% CAGR compared to SO's 2.9%. 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%). SRE: Dividend growth has been steady, with a 3-year CAGR of 4.1% and a 5-year CAGR of 4.1% (10-year: 6.1%).
Dividend Safety
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. SRE's dividend safety is rated "Moderate." The payout ratio of 79% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x. SO's payout ratio of 73% is more conservative than SRE's 79%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in SO generates approximately $322/year in dividend income, compared to $285/year from SRE — a difference of $37/year. At $100,000, that gap widens to $370/year.
Verdict
- Best for income: SO
- Best for growth: SRE
- Best for safety: SO
Frequently Asked Questions
Which has a higher dividend yield, SO or SRE?
Southern Co (SO) has a higher dividend yield of 3.22% compared to Sempra (SRE) at 2.85%.
Is SO or SRE a better dividend growth stock?
Sempra has the stronger dividend growth with a 5-year CAGR of 4.1%, compared to Southern Co's 2.9%.
Which is safer for dividend income, SO or SRE?
Southern Co's dividend safety is rated "Moderate" while Sempra 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. The payout ratio of 79% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x.
How much income does $10,000 in SO vs SRE generate?
A $10,000 investment in SO generates approximately $322/year in dividends, while the same amount in SRE generates about $285/year.
Is SO or SRE a Dividend Aristocrat?
Southern Co is a Dividend Aristocrat (25 years) and Sempra is a Dividend Contender (15 years).
Which has a lower payout ratio, SO or SRE?
Southern Co has a lower payout ratio of 73% compared to Sempra's 79%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
SO vs SRE: which is better for retirement income?
It depends on your priorities. SO for current income, SRE for dividend growth, SO for safety. Many retirement investors hold both for diversification.
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