Southern Looks Like a Timely Buy

The rise in bond rates has resulted in a substantial recent pullback in utilities stocks. A lot of this move has been warranted, because these stocks were selling at the higher end of their historic valuation trading bands. But in the wake of this pullback, a few select opportunities in the utilities space are now appealing.

One is Southern (SO). The company has underperformed its peers over the past year because of what should be one-time operating hiccups. First, Southern is experiencing construction cost overruns at generating plant expansions in Mississippi and Georgia. These setbacks should be resolved in 2014. Second, rate increases at regulated power subsidiaries in Florida, Georgia and Alabama look like they will be shy of expectations. Fortunately, overall power rates and allowed returns are still very healthy....350 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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