Southern Company:
Four Drawdowns, Four Lessons.
Over the past two decades, Southern Company has weathered four significant declines. Each was different in depth, duration, and cause. Each carries a separate warning for the retiree holding a concentrated position in SO. What follows is the price record — not opinion — drawn with both price-only and total-return lines, alongside the S&P 500 for context.
(COVID, 2020)
(Vogtle/Kemper, in months)
(Vogtle, with dividends)
20 years
Price tells one story. Total return tells another. Time tells the truth.
A stock's price chart understates what a long-term shareholder actually experienced. Dividends reinvested change the picture meaningfully — sometimes dramatically. But neither number captures the third dimension that matters most to a retiree drawing income: how long the position stayed underwater. Each drawdown below is presented with all three measurements. The S&P 500 line is shown as context — not as an indictment of SO, which has been a strong long-term performer, but to ground the experience in what a broadly diversified investor lived through during the same window.
The Financial Crisis
Sep 2008 — Mar 2009 · 17 months to recoveryIndexed to 100 at September 2008 peak. Lines approximate based on monthly closes.
The Vogtle & Kemper Years
May 2013 — Oct 2017 · 54 months to recoveryIndexed to 100 at May 2013 peak. SO ground sideways while the broader market climbed 62%.
This is the drawdown most likely to be felt by the people I serve, because many of them lived through it in real time. The price decline was modest — about 20%. The total return decline, thanks to a 4–5% dividend reinvested over a long period, was just 3.5%. By the dividend math alone, this was almost a non-event.
But the chart shows what the math hides. For four and a half years, an SO concentration held flat while the broader market rose 62%. That is the opportunity cost of concentration during a slow grind — invisible on a year-end statement, devastating to a withdrawal plan that assumed continued appreciation, and the period most likely to test a retiree's nerve.
The COVID Shock
Feb 2020 — Jul 2021 · 17 months to recoveryBoth SO and the S&P collapsed; the S&P recovered faster. Dividends could not soften a 17-month break.
COVID is the exception that proves the rule. Utilities — supposedly defensive — fell harder than the S&P 500 during the panic and recovered more slowly. The reason was specific to the moment: forced selling of high-dividend, leveraged sectors as Treasury yields collapsed, and questions about whether utility customers would keep paying bills during widespread economic shutdown.
The lesson for a concentrated SO holder is not to discount defensive assets. It is that defensive characteristics work in some crises and not others, and a retirement plan that depends on any single asset behaving the way the textbook says is a plan with a hidden assumption.
The Rate-Hike Selloff
Apr 2022 — Mar 2023 · 11 months to recoveryRising rates pressured all dividend equities; SO held up better than the S&P and recovered cleanly.
The 2022 selloff is the cleanest demonstration of how dividends do their work. The price decline was 17.5%, but with dividends reinvested the total-return drawdown was just 11.5% — a six-point cushion in a single year. The S&P 500 fell harder.
This is the experience that creates overconfidence in concentrated SO holders. A drawdown that looks mild on paper, well-cushioned by dividends, and short in duration. The instinct after a year like this is to conclude that SO concentration is safer than the market. The other three drawdowns on this page are why that instinct deserves to be examined.
Time Underwater, Side by Side.
Depth of drawdown gets the headlines. Duration gets the retirement. A retiree withdrawing 4% annually cannot afford to sell shares of a position that is below cost for years. The chart below collapses all four events to the one number that decides whether a concentrated position is survivable: how many months it took to get back to even, dividends included.
Bars scaled to the longest event (Vogtle/Kemper, 54 months). The Vogtle period is more than three times as long as any other drawdown — and was the smallest by depth. Duration and depth are not the same risk.
Four Drawdowns, Four Distinct Risks.
Defensive does not mean immune.
SO held up beautifully in the Financial Crisis and the rate-hike selloff. It fell harder than the S&P 500 during COVID. A diversified portfolio is built for the crisis you cannot see coming, not the one that matches your asset's textbook profile.
Dividends cushion, but they cannot rescue.
The Vogtle period's 3.5% total-return drawdown looks almost trivial. The 54 months it took to get there does not. A retiree drawing income from a flat position for four and a half years has a real problem regardless of what the year-end statement shows.
Concentration removes the diversification cushion.
Every drawdown above describes what happened to SO. The same period may have produced very different outcomes for a diversified portfolio — sometimes better, sometimes worse, but always uncorrelated to the fate of one company.
The worst drawdown is the one your plan didn't model.
Sequence-of-returns risk is not theoretical. In real time, it tests families, marriages, and retirement plans. The right question is not whether SO is a good stock — it has been. The right question is whether your overall portfolio is built so that any single holding going underwater for half a decade is survivable.
Before the next drawdown begins.
I have spent thirty years working with Southern Company employees and retirees. I have watched these four drawdowns unfold in real time, in the accounts of real families. The story this page tells is a story I know well. If your retirement plan is built around a concentrated SO position, the question is not whether the company is sound. The question is whether your plan is sound when one asset goes quiet for four years.
The Financial Crisis is the textbook case for owning a utility. The S&P 500 lost more than half its value. SO lost roughly 28% on price, and just 22% with dividends reinvested. A diversified S&P 500 investor was looking at five years of recovery work. An SO holder was made whole in seventeen months.
The lesson is not that SO is recession-proof. It is that essential-service utilities with regulated monopoly franchises trade differently from cyclical equities during a credit-driven crisis. That is worth knowing — and worth not overgeneralizing.