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Atmos Energy Corporation (ATO) - free report >>
Spire Inc. (SR) - free report >>
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Atmos Energy Corporation (ATO) - free report >>
Spire Inc. (SR) - free report >>
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Atmos Energy (ATO) to Gain From Investments & Residential Demand
Atmos Energy Corporation’s (ATO - Free Report) capital expenditure plan, solid residential customer contribution and positive regulatory outcomes will continue to boost its performance. The company’s steady performance has enabled it to reward shareholders with consistent hikes in annual dividend rate.
However, this Zacks Rank #2 (Buy) stock has to face strong competition from other clean alternative fuel suppliers.
Tailwinds
Atmos Energy has a strong capital expenditure plan to increase the safety and reliability of its natural gas pipelines. A major portion of the company’s planned capital expenditure is used to improve the safety and dependability of its distribution and transportation systems.
ATO invested $2.45 billion in fiscal 2022 and plans to invest $2.7 billion in fiscal 2023. It is also planning to invest $15 billion from fiscal 2023 through 2027, more than 85% of which will be allocated to the existing operations’ security enhancement.
In order to increase the safety and reliability of its systems, Atmos Energy aims to replace miles of old transmission and distribution lines over the next five years. The company is also installing wireless meter reading to facilitate customers.
ATO gains from industrial customer additions and constructive rate outcomes. The industrial customer base expansion boosted its operating income.
Headwinds
Atmos Energy faces competition from other suppliers of natural gas and alternative fuels for sale to industrial customers. In addition, the company has to compete with energy products like electricity and propane that are used in the cooking market, as well as for space and water heating.
Other Stocks to Consider
Some other top-ranked stocks from the same industry are ONE Gas, Inc. (OGS - Free Report) , New Jersey Resources (NJR - Free Report) and Spire Inc. (SR - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ONE Gas, New Jersey Resources and Spire’s 2023 earnings per share indicates an increase of 1.23%, 5.2% and 9.1%, respectively.
Long-term (three- to five-year) earnings growth of ONE Gas, New Jersey Resources and Spire is pegged at 5%, 6% and 4.22%, respectively.