Atmos Energy Corporation (ATO - Free Report) has been gaining from planned capital investments to strengthen the distribution and transportation systems. An expanding customer base and efficient debt management are also likely to drive its performance over the long run.
Atmos Energy currently carries a Zacks Rank #3 (Hold) and has delivered an average earnings surprise of 1.1% in the last four quarters. ATO’s long-term (three to five years) earnings growth is currently pegged at 7.3%. Moreover, Atmos Energy’s current dividend yield of 2.3% is better than the Zacks S&P 500 composite average of 1.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tailwinds
Atmos Energy has a sturdy capital expenditure plan and a major portion of the planned expenditure is utilized to improve the safety and reliability of the distribution and transportation systems. ATO invested $2 billion in fiscal 2021 and plans to invest in the range of $2.4-$2.5 billion in fiscal 2022. Atmos Energy also expects to invest in the range of $13-$14 billion from fiscal 2022 to 2026, out of which more than 80% will be allocated to enhance the safety of existing operations.
Atmos Energy is also taking measures to maintain and upgrade the existing infrastructure. ATO aims to replace around 4,000 to 5,000 miles of old transmission and distribution lines and 100,000 to 150,000 steel service lines in the next five years to make its systems more reliable.
Atmos Energy’s total debt to capital at the end of the second quarter of fiscal 2022 was 47%, lower than the industry average of 49.5%. The company has been assigned top-tier credit ratings by rating agencies and as of Mar 31, 2022, Atmos Energy had $3.5 billion in available liquidity, which was enough to meet the current obligations. At the end of the fiscal second quarter of 2022, the times interest earned ratio was 10.5. The strong ratio indicates that the company will be able to meet the current debt obligations without any difficulty.
Headwinds
Atmos Energy operates in a highly competitive gas distribution industry and has to compete with clean alternate fuel suppliers for sales to industrial customers. Despite making investments, the risks of accidents remain in the distribution and transportation of natural gas. Dependence on a single state for the bulk of its revenues exposes ATO to the vagaries of weather and the economic conditions of that state.
Price Performance
In the past six months, shares of Atmos Energy have rallied 23.3% compared with the industry’s 19.8% growth.
Stocks to Consider
Some better-ranked stocks from the same sector, such as DTE Energy (DTE - Free Report) , American Electric Power (AEP - Free Report) and American Water Works (AWK - Free Report) , each carry a Zacks Rank #2 (Buy).
The long-term (three to five years) earnings growth of DTE Energy, American Electric Power and American Water Works is 6.2%, 6% and 8.1%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of DTE Energy, American Electric Power and American Water Works has moved up 0.8%, 5.7% and 4.9% year over year, respectively.
DTE, AEP and AWK delivered an average earnings surprise of 9%, 2.4% and 5.3%, respectively, in the last four quarters.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
Atmos Energy Corporation (ATO - Free Report) has been gaining from planned capital investments to strengthen the distribution and transportation systems. An expanding customer base and efficient debt management are also likely to drive its performance over the long run.
Atmos Energy currently carries a Zacks Rank #3 (Hold) and has delivered an average earnings surprise of 1.1% in the last four quarters. ATO’s long-term (three to five years) earnings growth is currently pegged at 7.3%. Moreover, Atmos Energy’s current dividend yield of 2.3% is better than the Zacks S&P 500 composite average of 1.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tailwinds
Atmos Energy has a sturdy capital expenditure plan and a major portion of the planned expenditure is utilized to improve the safety and reliability of the distribution and transportation systems. ATO invested $2 billion in fiscal 2021 and plans to invest in the range of $2.4-$2.5 billion in fiscal 2022. Atmos Energy also expects to invest in the range of $13-$14 billion from fiscal 2022 to 2026, out of which more than 80% will be allocated to enhance the safety of existing operations.
Atmos Energy is also taking measures to maintain and upgrade the existing infrastructure. ATO aims to replace around 4,000 to 5,000 miles of old transmission and distribution lines and 100,000 to 150,000 steel service lines in the next five years to make its systems more reliable.
Atmos Energy’s total debt to capital at the end of the second quarter of fiscal 2022 was 47%, lower than the industry average of 49.5%. The company has been assigned top-tier credit ratings by rating agencies and as of Mar 31, 2022, Atmos Energy had $3.5 billion in available liquidity, which was enough to meet the current obligations. At the end of the fiscal second quarter of 2022, the times interest earned ratio was 10.5. The strong ratio indicates that the company will be able to meet the current debt obligations without any difficulty.
Headwinds
Atmos Energy operates in a highly competitive gas distribution industry and has to compete with clean alternate fuel suppliers for sales to industrial customers. Despite making investments, the risks of accidents remain in the distribution and transportation of natural gas. Dependence on a single state for the bulk of its revenues exposes ATO to the vagaries of weather and the economic conditions of that state.
Price Performance
In the past six months, shares of Atmos Energy have rallied 23.3% compared with the industry’s 19.8% growth.
Stocks to Consider
Some better-ranked stocks from the same sector, such as DTE Energy (DTE - Free Report) , American Electric Power (AEP - Free Report) and American Water Works (AWK - Free Report) , each carry a Zacks Rank #2 (Buy).
The long-term (three to five years) earnings growth of DTE Energy, American Electric Power and American Water Works is 6.2%, 6% and 8.1%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of DTE Energy, American Electric Power and American Water Works has moved up 0.8%, 5.7% and 4.9% year over year, respectively.
DTE, AEP and AWK delivered an average earnings surprise of 9%, 2.4% and 5.3%, respectively, in the last four quarters.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
Get the latest research report on DTE - FREE
Get the latest research report on AEP - FREE
Get the latest research report on ATO - FREE
Get the latest research report on AWK - FREE