Institutional investors appear to be taking a wait-and-see approach regarding the economic recovery in and around Atlanta, Georgia, SO's core area. The commercial side of energy use (primarily the industrial segment), will take longer to snap-back, but a quicker residential recovery should offset that industrial sluggishness: the greater Atlanta region did not experience as large a residential housing bubble as the West and East coasts, hence the bust was not as severe, from a household formation standpoint.

Other SO positives: its dividend stream, experienced management, 42.6 megawatts of generating capacity, and the predictability of operations in a steady-habits region of the United States. The First Call FY2009/FY2010 EPS estimates for SO are $2.35 to $2.45.

Technically, Southern's stock has held a re-test of a low at $26.50 and now has good, double-bottom support at that level. The chart also remains in a mild uptrend, which is acceptable for a utility. The P/E of 16 is not low, but given the company's stability and the attractive mix of safety, good dividend, and decent prospects for growth, the scale is tipped well toward a Buy.

Stock Analysis: Southern Co.'s is a low-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in SO now; then buy another 25% in one month, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your SO position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $17.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.