Southern Company Gas subsidiaries complete renewable natural gas deals

ATLANTA - Virginia Natural Gas and Chattanooga Gas, subsidiaries of Southern Company Gas, have completed new renewable natural gas (RNG) purchases, according to a company press release issued Wednesday. Southern Company (NYSE: SO), currently trading at $89.91 with a market capitalization of nearly $99 billion, has demonstrated strong financial performance with a 9.58% revenue growth over the last twelve months. According to InvestingPro analysis, the company maintains a GOOD financial health score, reflecting its robust operational foundation.

The transactions are estimated to reduce lifecycle emissions by 18,978 metric tons of carbon dioxide equivalent (CO₂e), comparable to carbon sequestered by 19,036 acres of U.S. forests in one year.

The purchases involve acquiring environmental attributes from RNG facilities in Texas and follow the utilities’ initial RNG purchases in 2023.

RNG is produced from methane emitted by landfills, agricultural waste, wastewater and food waste. By capturing this methane before it enters the atmosphere, the fuel reduces greenhouse gas emissions while remaining compatible with existing natural gas infrastructure.

"We’re leveraging our advanced infrastructure to deliver cleaner fuels," said Bryan Batson, Southern Company Gas Executive Vice President of External Affairs. The company’s commitment to infrastructure development is backed by its strong financial position, with InvestingPro data showing a consistent 23-year streak of dividend increases and a current attractive yield of 3.26%. For detailed analysis of Southern Company’s infrastructure investments and financial metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The deals were facilitated by supportive policies in both Virginia and Tennessee. Virginia’s Energy Innovation Act and Sustainable Gas Program encourage RNG production, while Tennessee’s Natural Gas Innovation Act permits utilities to pursue cleaner energy options.

Virginia Natural Gas also recently announced a collaboration with Hampton Roads Sanitation District to develop a facility that will convert biogas from organic waste into RNG.

Southern Company Gas, a subsidiary of Southern Company (NYSE:SO), serves approximately 4.4 million natural gas utility customers through regulated distribution companies in four states. While the stock currently appears slightly overvalued according to InvestingPro’s Fair Value analysis, the company’s stable utility operations and consistent dividend growth make it worth watching. Subscribers can access additional ProTips and detailed financial metrics to make more informed investment decisions.

In other recent news, Southern Company reported its first-quarter earnings for 2025, surpassing expectations with an adjusted earnings per share (EPS) of $1.23, exceeding the forecast of $1.19. The company’s revenue for the quarter reached $7.78 billion, which was higher than the projected $7.31 billion. Jefferies analysts upgraded Southern Company’s stock from Hold to Buy, citing strong growth prospects, with a new price target of $100. This decision was influenced by Southern Company’s potential to secure a significant portion of an 8.5 gigawatt opportunity through its subsidiary, Georgia Power. Additionally, Southern Company has upsized its convertible notes offering to $1.45 billion, with plans to use the proceeds primarily for repurchasing existing convertible notes and paying down commercial paper borrowings.

Scotiabank maintained a Sector Outperform rating on Southern Company, setting a price target of $98. The analyst praised the company for its consistent EPS growth and strategic positioning to capitalize on emerging opportunities. Southern Company also demonstrated proactive financial management by addressing its equity needs and managing tariff exposures. The company remains focused on extending plant life and modernizing facilities, with significant investments proposed in its Georgia Power 2025 Integrated Resource Plan. These developments indicate Southern Company’s ongoing efforts to strengthen its financial health and strategic growth initiatives.

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