Opportunities in SO and MO

Zacks highlights commentary from People and Picks Member «DiviMO».

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This week as I continue the commentary on our 'investing for income' strategy, I continue to look for good opportunities.

Two stock yesterday were reviewed by the 'media marvel,' Jim Cramer, on his Mad Money TV show. He was quite negative on tobacco companies and highly positive on The Southern Company (SO - Analyst Report).

 In response, the tobacco company Altria (MO - Analyst Report) is down. MO is a  highly respected dividend company, currently paying over 5%. It is a good time to move into this company. I currently own MO but would not mind a bit to own even more. In my case, in lieu of outright buying the stock, I could sell a naked put, draw the option premium with the opportunity to be assigned the stock at a lower strike level. However there is the chance of not getting assigned the stock. So the decision is , do I buy more outright or go the put option route with the opportunity to get assigned the stock? That is something that I will be considering today.

SO , a utility with solid growth, based in the Southeast is a company yielding 4.7% and has raised its dividend every year for the past decade. SO is becoming increasingly diversified; 53% of its energy is produced from coal compared to the previous level of 70%. The company uses nuclear, wind, solar, natural gas and biomass fuel in addition to coal. It has the largest biomass plant in the U.S. and the second largest solar facility. The company is outperforming the S&P 500 and is able to pay its dividend consistently because of the rapid economic recovery in Southeastern states.

SO share price is up to 40 intra-day. It might be ahead of itself. Since I own SO, I am considering writing a covered call to  generate extra income with the premium. If called and I have to sell the stock, since I am in a tax-deferred acount with no tax penalties, I can buy back the stock if desired.

This week........

Later this week, I have three dividend payments to be paid, all  from stocks/securities  paying monthly dividends, and the other is from a stock paying quarterly. On July 1, I have another dividend payment to be paid. One of the securities is my one holding pertaining to preferred shares. In lieu of having a preferred stock, I elected to own an ETF, (PGF) holding a basket of preferred stocks. It will pay me a dividend on July 30. My yield-on-cost is 6.99%.

The most recent picks by «DiviMO» are:
A buy rating on Darden Restaurants (DRI - Analyst Report),
a buy rating on Dendreon (DNDN - Analyst Report) and
a buy rating on Iron Mountain (IRM - Analyst Report).

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Read the full analyst report on SO

Read the full analyst report on MO

Read the full analyst report on DRI

Read the full analyst report on DNDN

Read the full analyst report on IRM