We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons to Add Atmos Energy (ATO) to Your Portfolio Right Now
Read MoreHide Full Article
Atmos Energy Corporation’s (ATO - Free Report) systematic investments, solid contribution from residential customers and positive regulatory outcomes will continue to drive its bottom line. The company has a sturdy capital expenditure plan, helping it to increase the safety and reliability of its natural gas pipelines, distribution and transportation systems. ATO plans to invest $15 billion during fiscal 2023-2027. Given its strong dividend history and growth opportunities, Atmos Energy makes for a solid investment option in the utility sector.
The Zacks Consensus Estimate for fiscal 2023 earnings per share (EPS) has increased 0.3% to $6 in the past 60 days. This implies a year-over-year increase of 7.1%.
The company’s long-term (three- to five-year) earnings growth is pegged at 7.5%. It had delivered an average earnings surprise of 4.61% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Atmos Energy’s ROE is 8.5%, higher than the sector’s average of 5.78%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Dividend History
Atmos Energy has raised its annual dividend for 39 consecutive years. Over the past five years, it has raised its dividend five times on a year-over-year basis, for an average annual increase of 8.95%. Recently, the company’s board of directors has declared a quarterly dividend of 74 cents per share. The new dividend for fiscal 2023 is $2.96 per share, indicating an 8.8% increase from fiscal 2022. The company aims to increase its dividend in the range of 6-8% per year through fiscal 2026, subject to the approval of its board of directors. Atmos Energy’s current dividend yield is 2.7%, better than the Zacks S&P 500 Composite’s yield of 1.6%.
Systematic Investments & Customer Growth
The company invested $2.45 billion in fiscal 2022 and plans to invest $2.7 billion in fiscal 2023. Courtesy of constructive regulatory mechanism, more than 90% of ATO’s annual capital investments start earning returns within six months and nearly 99% within 12 months. Owing to a positive regulatory outcome and approximately 64% contribution from residential customers, Atmos Energy’s operating revenues for fiscal first-quarter 2023 increased to $1,484 million from $1,012.8 million in the year-ago quarter.
The company aims to replace miles of old transmission and distribution lines over the next five years in order to make its systems more reliable. It is also installing wireless meter reading to assist customers. In fiscal 2022, ATO was able to add 62,000 new customers to its existing clientele base.
Price Performance
In the past six months, Atmos Energy’s shares have gained 5.1% against the industry’s average 0.5% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are New Jersey Resources (NJR - Free Report) , ONE Gas, Inc. (OGS - Free Report) and Spire, Inc. (SR - Free Report) , each holding a Zacks Rank #2 at present.
New Jersey Resources’ long-term (three- to five-year) earnings growth is pegged at 6%. The Zacks Consensus Estimate for 2023 EPS is $2.63, implying a year-over-year increase of 5.2%.
ONE Gas’ long-term earnings growth is pegged at 5%. The Zacks Consensus Estimate for 2023 EPS is $4.13, implying a year-over-year increase of 1.23%.
Spire’s long-term earnings growth is pegged at 4.22%. The Zacks Consensus Estimate for 2023 EPS is $4.21, implying a year-over-year increase of 9.1%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Reasons to Add Atmos Energy (ATO) to Your Portfolio Right Now
Atmos Energy Corporation’s (ATO - Free Report) systematic investments, solid contribution from residential customers and positive regulatory outcomes will continue to drive its bottom line. The company has a sturdy capital expenditure plan, helping it to increase the safety and reliability of its natural gas pipelines, distribution and transportation systems. ATO plans to invest $15 billion during fiscal 2023-2027. Given its strong dividend history and growth opportunities, Atmos Energy makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projections & Earnings Growth
The Zacks Consensus Estimate for fiscal 2023 earnings per share (EPS) has increased 0.3% to $6 in the past 60 days. This implies a year-over-year increase of 7.1%.
The company’s long-term (three- to five-year) earnings growth is pegged at 7.5%. It had delivered an average earnings surprise of 4.61% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Atmos Energy’s ROE is 8.5%, higher than the sector’s average of 5.78%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Dividend History
Atmos Energy has raised its annual dividend for 39 consecutive years. Over the past five years, it has raised its dividend five times on a year-over-year basis, for an average annual increase of 8.95%. Recently, the company’s board of directors has declared a quarterly dividend of 74 cents per share. The new dividend for fiscal 2023 is $2.96 per share, indicating an 8.8% increase from fiscal 2022. The company aims to increase its dividend in the range of 6-8% per year through fiscal 2026, subject to the approval of its board of directors. Atmos Energy’s current dividend yield is 2.7%, better than the Zacks S&P 500 Composite’s yield of 1.6%.
Systematic Investments & Customer Growth
The company invested $2.45 billion in fiscal 2022 and plans to invest $2.7 billion in fiscal 2023. Courtesy of constructive regulatory mechanism, more than 90% of ATO’s annual capital investments start earning returns within six months and nearly 99% within 12 months. Owing to a positive regulatory outcome and approximately 64% contribution from residential customers, Atmos Energy’s operating revenues for fiscal first-quarter 2023 increased to $1,484 million from $1,012.8 million in the year-ago quarter.
The company aims to replace miles of old transmission and distribution lines over the next five years in order to make its systems more reliable. It is also installing wireless meter reading to assist customers. In fiscal 2022, ATO was able to add 62,000 new customers to its existing clientele base.
Price Performance
In the past six months, Atmos Energy’s shares have gained 5.1% against the industry’s average 0.5% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are New Jersey Resources (NJR - Free Report) , ONE Gas, Inc. (OGS - Free Report) and Spire, Inc. (SR - Free Report) , each holding a Zacks Rank #2 at present.
New Jersey Resources’ long-term (three- to five-year) earnings growth is pegged at 6%. The Zacks Consensus Estimate for 2023 EPS is $2.63, implying a year-over-year increase of 5.2%.
ONE Gas’ long-term earnings growth is pegged at 5%. The Zacks Consensus Estimate for 2023 EPS is $4.13, implying a year-over-year increase of 1.23%.
Spire’s long-term earnings growth is pegged at 4.22%. The Zacks Consensus Estimate for 2023 EPS is $4.21, implying a year-over-year increase of 9.1%.