Also, the "big" concern right now is interest rates going up. The theory goes, when rates go up, utilities shares go down because they are bond proxies in a low rate environment. While in the short term, that premise holds true, the stock reacts negatively to talk of higher rates. However, if you go back to times where rates were much higher than they are now, SO typically yields between 4.75 and 5%, putting the current price based on yield pretty much at it's historical average. PE is a tad on the high side, though increasing earnings will mitigate that risk. SO also has something going for it, that other utilities do not. Their coverage areas overall are growing in population, as well as attracting more industrial and manufacturing businesses which will all increase power demand. Don't get me wrong, this isn't a high flying stock, but if you're looking for slow steady grown and a solid and steadily growing dividend, SO's the place to be. I'm holding my shares, and will certainly look to add if the price gets much lower than this.
Looking at the Heinz deal, they paid about 22 times prior year's earnings of 3.26, which gets the buyout price of 72.50. Using that logic, you get an offer price on KRFT of 69.30 (22*3.15). Using this year's estimated earnings of 3.47, you're looking at an offer price of 76.34.
Heinz was bought at a 20% premium over the price prior to announcement. Using that logic, you get an offer price on KRFT of 73.20.
Heinz was bought at a 30% premium over the one year average share price. Using that logic, KRFT's average share price over the last 12 months was 59.38, so you get an offer price of 77.19.
That tells me we're looking at a potential offer price somewhere between 70 and 80 bucks a share, realistically. I think 75 bucks a share gets this deal done, if in fact both sides are serious. Just one man's opinion of course. Best of luck to all.