SO vs XEL: Dividend Yield, Growth & Safety Comparison
Southern Co (SO) and Xcel Energy Inc (XEL) are both in the Utilities sector, making them natural rivals for dividend investors. Both stocks offer similar yields — SO at 3.22% and XEL at 2.94%. For dividend growth, XEL leads with a 5-year CAGR of 11.5% versus SO's 2.9%. Both stocks carry a "Moderate" dividend safety rating. SO is a Dividend Aristocrat with 25 years of consecutive increases.
Key Metrics Comparison
| Metric | SO | XEL |
|---|
| Dividend Yield | 3.22% | 2.94% |
| Annual Dividend | $2.92 | $2.28 |
| 5-Year CAGR | 2.9% | 11.5% |
| Payout Ratio | 73% | 67% |
| Consecutive Years | 25 | 1 |
| Price | $94.53 | $81.32 |
Yield Comparison
Southern Co (SO) currently yields 3.22%, which is solid for the broader market. That's 0.28% more than Xcel Energy Inc (XEL), which yields 2.94%. In dollar terms, SO pays $2.92/share annually versus XEL's $2.28/share.
Dividend Growth
Over the past five years, XEL has grown its dividend at a 11.5% 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%). XEL: Dividend growth is accelerating — the 3-year CAGR of 16.6% exceeds the 5-year rate of 11.5% and the 10-year rate of 8.5%.
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. XEL's dividend safety is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. XEL's payout ratio of 67% is more conservative than SO's 73%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in SO generates approximately $322/year in dividend income, compared to $294/year from XEL — a difference of $28/year. At $100,000, that gap widens to $280/year.
Verdict
- Best for income: SO
- Best for growth: XEL
- Best for safety: XEL
Frequently Asked Questions
Which has a higher dividend yield, SO or XEL?
Southern Co (SO) has a higher dividend yield of 3.22% compared to Xcel Energy Inc (XEL) at 2.94%.
Is SO or XEL a better dividend growth stock?
Xcel Energy Inc has the stronger dividend growth with a 5-year CAGR of 11.5%, compared to Southern Co's 2.9%.
Which is safer for dividend income, SO or XEL?
Southern Co's dividend safety is rated "Moderate" while Xcel Energy Inc 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 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x.
How much income does $10,000 in SO vs XEL generate?
A $10,000 investment in SO generates approximately $322/year in dividends, while the same amount in XEL generates about $294/year.
Is SO or XEL a Dividend Aristocrat?
Southern Co is a Dividend Aristocrat with 25 consecutive years of increases. Xcel Energy Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, SO or XEL?
Xcel Energy Inc has a lower payout ratio of 67% compared to Southern Co's 73%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
SO vs XEL: which is better for retirement income?
It depends on your priorities. SO for current income, XEL for dividend growth, XEL for safety. Many retirement investors hold both for diversification.
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