NEE vs. SO: Which Utility Stock Wins for Retirement Income in 2026?

NextEra Energy (NYSE:NEE | NEE Price Prediction) or Southern Company (NYSE:SO): which utility is the better fit for someone building a retirement portfolio right now? Both stocks slipped over the past month, NextEra by 7.58% and Southern by 6.23%. Meanwhile, the 10-year Treasury yield rose to 5.17%, raising the hurdle for every income stock. Southern pays $0.76 per share each quarter versus NextEra’s $0.6232. A bigger per-share check only translates into a bigger yield once you factor in what each stock costs to buy, and the two trade at different levels. Measured against price, Southern at $82.74 yields 3.6%, while NextEra at $75.63 yields 3.15%.

Income Today: Southern Takes This Round

Southern’s forward annualized dividend is $3.04 per share, with $3.00 paid over the trailing 12 months. Its latest raise moved the quarterly payment from $0.74 to $0.76, the small, predictable step retirees can budget around. NextEra’s forward rate is $2.4928, with $2.4361 paid over the trailing 12 months, after a raise from $0.5665 to $0.6232.

One warning on NextEra’s history: the per-share dividend reads $1.40 at the August 27, 2020 ex-dividend date and $0.35 at the November 25, 2020 date. That change reflects a stock split, which raised the share count and left holders’ total income intact. For cash needed today, Southern wins.

Dividend Growth: NextEra Raises Faster

NextEra guides to dividend growth of roughly 10% per year through 2026 off a 2024 base, then 6% per year from year-end 2026 through 2028. Earnings support it: management targets 8%+ compound annual adjusted EPS growth through 2032 off a 2025 base of $3.71, with 2026 guidance of $3.92 to $4.02. Florida Power & Light’s regulatory capital employed grew about 9.3%, earning a regulatory ROE near 11.7%.

Southern offered no dividend growth target on its second-quarter call. It expects 2026 adjusted EPS “near or at the top” of its $4.50 to $4.60 range, solid but missing a multi-year anchor. Over 10 years, NextEra shares returned 219.3% versus Southern’s 143.17%. NextEra wins growth.

Dividend Safety: Southern’s Regulated Base Holds Up Better

Utility dividends come from earnings regulators allow. Commissions set rates in rate cases and grant an allowed return on equity on invested capital, so capital spending expands the rate base that funds payouts. Southern’s earnings come mostly from rate-regulated operations across the Southeast. Base rates are held stable in Georgia and Alabama until 2029, and its large-load contracts, totaling more than 17 gigawatts, carry minimum bills covering at least 100% of additional cost to serve. Its beta is 0.316 versus NextEra’s 0.644.

NextEra pairs its Florida utility with NextEra Energy Resources, a competitive renewables and storage developer holding a 35.1 gigawatt backlog. That unit grew adjusted earnings about 18% last quarter, yet it lives with power-market pricing, clean energy policy changes, and capital market access. The pending Dominion Energy (NYSE:D) combination, expected to close in H2 2027, adds approval risk. Southern carries its own drag: roughly $205M of pre-tax wind repowering charges remaining in 2026. Both payouts look well covered by guided earnings, but Southern wins on the quality of what supports the check.

Verdict: Southern for Retirees Living on Income, NextEra for Builders

For an investor already retired and drawing dividends to pay bills, Southern is the stronger fit. It yields more, trades at 17 times forward earnings versus NextEra’s 18, swings less, and draws income from a regulated base with rates locked in its two biggest states. (Building a ladder of payers like this one so the checks cover the bills without selling shares is the whole point of our free dividend ladder guide.)

For an investor several years from retirement who can reinvest, NextEra is the better holding. Guided raises supports by 8%+ earnings growth build a larger income stream later.

One event could flip this call: approval of the Dominion deal. Management says it would support about 11% annual growth in regulated capital employed through 2032, shifting NextEra toward regulated earnings and eating away Southern’s safety edge. That approval process will be worth tracking through 2027.

Contact [email protected] for any questions or corrections.