(03-17-2014, 01:15 PM)EricL Wrote:(03-17-2014, 11:50 AM)rnsmth Wrote: I have owned WAG for some time. Here is what I just did:
Trimmed WAG back to a full weight position. 90% plus total return since I purchased it, current yield 1.9%.
Used proceeds to bring SO up to a full weight position. Current yield 4.7%.
I don't know that WAG is any more overvalued than SO is but its hard to argue with your bump in income. Total return I'd expect to get more from WAG in the next 5 years but dividend income will no doubt be higher with SO.
Nothing wrong with taking a nice profit and averaging out your positions though.
SO is close to fair value, but it not overvalued, according to this Morningstar analysis.
Here is something I wrote a few days ago.
New Morningstar analysis on SO. It is an underweight position in our portfolios and I may need to bring it up to a full weight position
Morningstar on SO
Quote:While We See Most Regulated Utilities as Overvalued, Southern Trades at a Discount
In 2013, Southern's total return was less than 1%, trailing its 30 largest regulated utilities peers, the Morningstar Utilities Index (14%), and the S&P 500 (32%). However, we think this offers investors an attractive opportunity to own one of the strongest dividend-paying companies at a discount to fair value. Southern's historical premium price/earnings to peers has eroded, and the shares now trade at a small discount to the peer group on 2014 earnings, though on a price/book value basis the shares continue to trade at a modest but diminished premium despite earned and allowed returns well above peer averages. While these relative metrics don't drive our bullishness on Southern's shares, they do highlight how investor perceptions shifted over the course of 2013.