Atmos Energy Corporation (ATO - Free Report) and its subsidiaries are engaged in regulated natural gas distribution and storage business. Solid contribution from residential customers, returns within one year of investment and customer additions will continue to boost the company’s performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projection
The Zacks Consensus Estimate for fiscal 2022 has moved up 0.8% in the past 60 days to $5.47 per share. Fiscal 2022 revenue estimates of $4.01 billion imply year-over-year growth of 17.8%.
The Zacks Consensus Estimate for fiscal 2023 has moved up 1.2% in the past 60 days to $5.83 per share. Fiscal 2023 revenue estimates of $4.01 billion indicate year-over-year growth of 5.2%.
Stable Investments
Atmos Energy makes consistent investments to upgrade and maintain the existing infrastructure as well as expand operations. ATO invested $2 billion in fiscal 2021 and anticipates investing in the range of $2.4-$2.5 billion in fiscal 2022.
Atmos Energy is planning to invest $13-$14 billion from fiscal 2022 through 2026, out of which 80% will be allocated to enhance the safety of existing operations. The planned investment will result in 6-8% annual earnings growth over the same time frame.
Surprise History & Long-Term Earnings Growth
Atmos Energy has an impressive earnings surprise history. Its trailing four-quarter earnings surprise is 6.5%, on average.
ATO’s long-term (three to five years) earnings growth is currently pegged at 7.3%.
Dividend
Atmos Energy has a dividend yield of 2.66%, higher than the Zacks S&P 500 composite’s average of 1.35%. The company’s board of directors raised the quarterly dividend by 8.8% in November 2021, which marks the 152nd consecutive quarterly dividend. Atmos Energy targets annual dividend growth in the range of 6-8% and a long-term payout ratio of 50%.
Strong Credit Rating and Ample Liquidity
Atmos Energy has been assigned top-tier credit ratings by rating agencies. The strong ratings will allow the company to get quicker approval for loans. As of Sep 30, 2021, it had $2.9 billion available liquidity, which was enough to meet the current obligations. At fiscal fourth quarter-end, the company’s times interest earned ratio was 10.8, which improved 100 basis points from 9.8 at fourth-quarter fiscal 2020-end.
Price Performance
In the past six months, the stock has gained 3.8% against the industry’s decline of 2.3%.
Other Stocks to Consider
Other top-ranked stocks in the Zacks Utilities sector include Duke Energy Corporation (DUK - Free Report) , California Water Service Group (CWT - Free Report) and Chesapeake Utilities (CPK - Free Report) , each holding a Zacks Rank #2.
Duke Energy, California Water Service, and Chesapeake Utilities delivered an earnings surprise of 2.3%, 10.8% and 12.6%, respectively, on average, in the last four quarters.
The Zacks Consensus Estimate for 2022 earnings per share of Duke Energy, California Water Service and Chesapeake Utilities has moved up 0.2%, 3.2% and 0.4%, respectively, in the past 60 days.
Year to date, shares of Duke Energy, California Water Service and Chesapeake Utilities have returned 12.5%, 28.4% and 31%, respectively, compared with the sector’s 6.6% growth.
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Atmos Energy Corporation (ATO - Free Report) and its subsidiaries are engaged in regulated natural gas distribution and storage business. Solid contribution from residential customers, returns within one year of investment and customer additions will continue to boost the company’s performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projection
The Zacks Consensus Estimate for fiscal 2022 has moved up 0.8% in the past 60 days to $5.47 per share. Fiscal 2022 revenue estimates of $4.01 billion imply year-over-year growth of 17.8%.
The Zacks Consensus Estimate for fiscal 2023 has moved up 1.2% in the past 60 days to $5.83 per share. Fiscal 2023 revenue estimates of $4.01 billion indicate year-over-year growth of 5.2%.
Stable Investments
Atmos Energy makes consistent investments to upgrade and maintain the existing infrastructure as well as expand operations. ATO invested $2 billion in fiscal 2021 and anticipates investing in the range of $2.4-$2.5 billion in fiscal 2022.
Atmos Energy is planning to invest $13-$14 billion from fiscal 2022 through 2026, out of which 80% will be allocated to enhance the safety of existing operations. The planned investment will result in 6-8% annual earnings growth over the same time frame.
Surprise History & Long-Term Earnings Growth
Atmos Energy has an impressive earnings surprise history. Its trailing four-quarter earnings surprise is 6.5%, on average.
ATO’s long-term (three to five years) earnings growth is currently pegged at 7.3%.
Dividend
Atmos Energy has a dividend yield of 2.66%, higher than the Zacks S&P 500 composite’s average of 1.35%. The company’s board of directors raised the quarterly dividend by 8.8% in November 2021, which marks the 152nd consecutive quarterly dividend. Atmos Energy targets annual dividend growth in the range of 6-8% and a long-term payout ratio of 50%.
Strong Credit Rating and Ample Liquidity
Atmos Energy has been assigned top-tier credit ratings by rating agencies. The strong ratings will allow the company to get quicker approval for loans. As of Sep 30, 2021, it had $2.9 billion available liquidity, which was enough to meet the current obligations. At fiscal fourth quarter-end, the company’s times interest earned ratio was 10.8, which improved 100 basis points from 9.8 at fourth-quarter fiscal 2020-end.
Price Performance
In the past six months, the stock has gained 3.8% against the industry’s decline of 2.3%.
Other Stocks to Consider
Other top-ranked stocks in the Zacks Utilities sector include Duke Energy Corporation (DUK - Free Report) , California Water Service Group (CWT - Free Report) and Chesapeake Utilities (CPK - Free Report) , each holding a Zacks Rank #2.
Duke Energy, California Water Service, and Chesapeake Utilities delivered an earnings surprise of 2.3%, 10.8% and 12.6%, respectively, on average, in the last four quarters.
The Zacks Consensus Estimate for 2022 earnings per share of Duke Energy, California Water Service and Chesapeake Utilities has moved up 0.2%, 3.2% and 0.4%, respectively, in the past 60 days.
Year to date, shares of Duke Energy, California Water Service and Chesapeake Utilities have returned 12.5%, 28.4% and 31%, respectively, compared with the sector’s 6.6% growth.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
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