Investing

Southern Company vs. NextEra Energy: One Stock Pulls Far Ahead on Sustainability

Southern Company offers a bigger dividend check today, but NextEra Energy is quietly building a growth engine that could leave Southern's payout in the dust over a 25-year retirement. The gap between these two utilities is wider than most investors…

By Chris Lange
Published October 9, 2026, 12:15pm ET · 3 min read

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

An old, dark green and brown oil pump jack stands prominently in the right foreground, with its intricate mechanical parts visible. In the mid-ground to the left, a tall, white wind turbine with three long blades extends towards a clear, bright blue sky. Several other white wind turbines are scattered across the distant horizon, interspersed with utility poles and power lines, over a landscape of dry, yellowish-brown grass and some darker vegetation.
A stark visual contrast of an oil pump jack and a wind farm illustrates the diverse and evolving energy portfolios of major utility companies. This dichotomy reflects the strategic decisions faced by firms like Southern Company and NextEra Energy in their pursuit of sustainable growth and investor dividends. © Aneese / Getty Images

A retirement-focused investor may be considering whether to own Southern Company (NYSE:SO | SO Price Prediction) or NextEra Energy (NYSE:NEE) right now. Both are regulated electric utilities that benefit from data center demand in the Southeast and Florida. Both have also lost ground over the past year, with Southern down 7.58% and NextEra down 5.56%. The two dividends grow at very different rates, though, and that difference determines this comparison.

Yield and Price: Southern Pays More Today

Southern’s annualized forward dividend is $3.04 and the stock trades at $86.05, which works out to a forward yield of about 3.53%. NextEra pays $2.4928 a year at $77.16 per share, a forward yield of roughly 3.23%. Southern also trades at a slightly lower forward multiple: 17x against 18x for NextEra.

Winner: Southern. It pays more income for every dollar committed and costs a little less on forward earnings.

SO price target

NEE price target

Dividend Safety: NextEra Has More Room to Spare

Southern’s forward dividend is about 70.7% of its fiscal 2025 EPS of $4.30. NextEra’s is about 67.2% of its 2025 adjusted EPS of $3.71. That figure falls to roughly 63.6% at the low end of its 2026 guidance of $3.92 to $4.02.

Cash flow points the same way. In 2025, Southern’s capital spending of $12.74 billion was larger than its $9.80 billion of operating cash flow. That left a $2.94 billion shortfall before it paid $3.02 billion in dividends. NextEra’s operating cash flow of $12.49 billion covered $9.27 billion of reported capex and left $3.21 billion to put toward its $4.68 billion payout. Both companies relied partly on outside funding to cover their dividends, and NextEra came much closer to full internal coverage.

One warning: NextEra’s capex hit $16.08 billion in the June 2026 quarter alone, so its 2026 spending is worth tracking.

Winner: NextEra. It has the lower payout ratio and stronger cash coverage.

Growth Behind Future Raises: NextEra Pulls Far Ahead

Southern lifted its quarterly dividend from $0.74 to $0.76 in February, a raise of about 2.7%. It has raised the payout by two cents a year in every year since 2023. Data centers are driving growth: commercial kWh sales rose 7.3% in the second quarter. Southern has not given a multi-year EPS growth target, however, and accelerated depreciation from wind repowering will cost about $205 million more in 2026.

NextEra raised its dividend from $0.5665 to $0.6232, a 10% increase. It plans raises of about 10% a year through 2026, then 6% a year through 2028. Earnings support that plan: management targets adjusted EPS growth of 8%+ a year through 2032. The company also has about 21 GW of data center interest at FPL and is restarting the Duane Arnold nuclear plant under a 25-year contract with Google (NASDAQ:GOOGL). CEO John Ketchum said: “We continue to expect to grow adjusted earnings per share at a compound annual growth rate of 8%+ through 2032.”

Winner: NextEra. Its planned raises are larger and backed by explicit long-term guidance.

Verdict: NextEra Takes the Retirement Income Crown

NextEra wins two of the three categories, and its dividend growth profile looks stronger for an income investor near retirement. A retirement can last 25 years, and a dividend growing 6% to 10% a year will soon outpace one growing about 2.7% a year. The extra yield Southern pays today is a small edge by comparison.

NextEra has more risk. Its beta is 0.639 versus 0.301 for Southern. Its shares are up only 10% over five years, while Southern’s are up 64.97%. Its Q4 2025 adjusted EPS of $0.54 also missed expectations. Analysts are more positive on NextEra anyway, with 11 Buy and 3 Strong Buy ratings. Southern has 13 Hold ratings.

SO analyst ratings

NEE analyst ratings

Southern tends to be the better fit for retirees who are already living off their dividends and need the biggest check and the calmest stock right now. Investors focused on long-term dividend growth may find NextEra’s profile more closely lined up with that goal (the whole idea of building a ladder you never have to sell out of is something we laid out in a free dividend ladder guide). Investors should watch the regulatory review of the Dominion Energy (NYSE:D) merger, which is expected to close in the second half of 2027, and whether the first post-2026 raise meets the 6% target.

Contact [email protected] for any questions or corrections.

1INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).2The probability of a member receiving $3,000 is 0.028%. If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Members must fund their account with a minimum of $50.00 to qualify. The probability percentage is subject to decrease. Members are only eligible for the Stock Award promotion upon opening their first brokerage account; subsequent cash brokerage accounts are ineligible for the promo, including for members with multiple accounts.

3Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.

4There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.
Chris Lange

Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.

His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.

When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.

All articles →