Many people are questioning why they should be in the stock market at all, now or ever. One person even asked me to show him a single stock that has had anything positive to show for itself in the last ten years.How about something positive over the entire ten years, or at least eight. Given I have made many sour picks this year I was proud to reveal one of my best picks ever and perhaps a good place to hide if you can get in on a dip. I first mentioned it in Scary market -- any safe stocks? about fourteen months ago when the market first took a dump.
My star attraction is the Southern Company (NYSE: SO) and the following is the chart. It has been a consistent performer and paid a dividend to boot which currently stands at 4.38%. As you can see this stock would have allowed you to double your money when the Standard & Poors 500 Index is actually down.
Here is what I said back then:
- Southern Company (SO) has been the biggest addition to our family holdings. It is now in at least seven portfolios and I have sold naked puts for November 30's. I AM NOT RECOMMENDING ANYBODY SELL NAKED PUTS. Selling naked puts is very risky and as they say..."don't try this at home folks." I like Southern because it is near a 52-week low, but has had five years of continuous growth. It pays a huge dividend, as utilities traditionally do, and it is located in a part of the country that has relatively low wages, cheap land, good weather, a favorable tax environment and it has seen tremendous growth in the past two decades, which I believe is very likely to continue.
'SO' there is good news to report even in a crappy market. Put this on your watch list. If the next ten years turn out to be as bleak as some fear they might, the dividend alone will provide you with some much needed shade from the heat.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of SO.
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Reader Comments (Page 1 of 1)
10-10-2008 @ 11:14PM
William said...
Great comments. Your chart is only price. If dividends are reinvested, the gains are better.