Last weekend, I was driving through rural Georgia, probably faster than I should have been, listening to the Allman Brothers. It was a hot, sunny August afternoon.

When I entered Taylor County, I started noticing something different about the farmland. For a significant stretch of the mostly deserted four-lane highway, the fields on either side weren’t planted with soybeans or cotton or peanuts or corn.

#-ad_banner-#It was photovoltaic solar panels. And I’m not talking about a small cluster used to power some sort of sensor or county extension project.

It was acres and acres of solar panels — the kind of scale capable of generating serious, civilization-powering electricity. Since I was in Georgia, there was only one company I thought of that was capable of a project that size: The Southern Company (NYSE: SO).

I was right.

Southern Company stock, like most sturdy utility stocks, has always been a favorite “widows and orphans” holding due to the company’s long, successful operating history and consistent, generous dividends. However, while many other utilities fit the same description, Southern Company is a cut above in its thinking and execution, making it a core holding in a large cap, blue-chip dividend facing portfolio.

The solar farm that stretched for 1,030 acres of Taylor County, Georgia was just one of 49 facilities that stretch across the country with a total generating capacity in excess of 12,300 megawatts of electricity. These projects that incorporate other renewable energy sources — such as biomass, wind, and natural gas — are housed under Southern Power, a wholly owned subsidiary of Southern Company.

This demonstrates Southern Company’s commitment to the future of power generation, which is also crucial to the long-term growth of the company. While 71% of the Southern Company’s revenue currently comes from regulated, electricity generation, two years ago, the company took a major step in diversifying its business mix by acquiring AGL Resources, the Southeast’s largest natural gas distributor. This also gave the company entrance into the booming liquefied natural gas (LNG) space. Through its Pivotal LNG subsidiary, Southern Company’s gas network has LNG production capacity of 554,000 gallons daily and storage capacity of up to 94 million gallons.

The gas business when combined with Southern Power brings Southern Company’s annual revenue from clean and alternative energy to 26%. While not quite a third, it’s a much bigger number compared to peers such as Duke energy (NYSE: DUK) or American Electric Power (NYSE: AEP).

Translated into dollars, clean and natural energy contributed nearly $6 billion to the company’s 2017 revenue of $23.031 billion (2018 revenue should be about the same with 2019 on track as well).

This all bodes well for the stock’s most attractive feature: the common dividend. Like most large regulated utilities, Southern Company is known for its steady and generous dividend. Currently at 5.1%, the company’s distribution to stockholders has grown at a nearly 3% average annual clip over the last five years.

Risks To Consider: The biggest threat to Southern Company’s growth plan is regulation — the root word in “regulated power producer”. State public service commissions set the company’s customer rates with the company’s guidance, of course. Naturally, the decisions of a state’s public service commission are politically driven. The nation’s current political climate is extremely populist on all fronts. Could this boil over into an under the radar governmental sector such as a public service commission? After what the country has seen in the political arena over the last two years? Anything is possible.

But as a regulated monopoly, historically, Southern Company has been an extremely considerate corporate neighbor. Their brand strength and reputation in the region is quite shiny. Their customer service is truly outstanding. Full disclosure: I’m one of their customers. I think their position is awfully solid.

On a financial level, the specter of higher interest rates continues to hover above utility companies. Utilities rely heavily on debt financing. Higher borrowing costs mean pinched margins. Although rates have crept up lately, yields are still at multi-century historic lows. Any fear surrounding rates is, most likely, overblown.

Action To Take: Southern Company has successfully made the transformation from an electric utility to a progressive energy company. Its focus on growing a real and profitable renewable energy business is taking root and will also benefit from economic growth in its home region of the Southeast.

While I have recommended other utility stocks in the past, Southern Company shares should be used when building the foundation of a sturdy, blue-chip portfolio. The current price range (see earlier chart) is, traditionally, the best place to initiate a position in my experience. Shares currently trade around $47 with a forward PE of 15.78 and a 5.1% dividend yield. Try not to chase the price if the yield falls below 5%. Should that happen, stay patient till the price comes back to the target area of the mid to low 40s.

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