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Atmos Energy (ATO) Rides on Investments & Customer Additions
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Atmos Energy Corporation’s (ATO - Free Report) long-term investment plan is expected to help increase the safety and reliability of its natural gas pipelines. The company gains from industrial customer additions and constructive rate outcomes. ATO’s steady performance has enabled it to reward shareholders through 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 sturdy capital expenditure plan that helps it in increasing the safety and reliability of its natural gas pipelines. A major portion of this planned capital expenditure is utilized to improve the safety and dependability of ATO’s distribution and transportation systems. In the fiscal second quarter of 2023, the company’s capital spending amounted to $1.4 billion, 86% of which was allocated to safety and reliability. In fiscal 2023, the company plans to invest $2.7 billion to further strengthen its operation.
Courtesy of constructive regulatory mechanism, more than 90% of Atmos Energy’s annual capital investments start earning returns within six months and nearly 99% within no more than 12 months.
The company benefits from industrial customer additions and constructive rate outcomes. Operating income is driven by industrial customer base expansion. Atmos Energy expects to add nearly 15 billion cubic feet to its annual demand once its 30 new industrial customers become fully operational.
Headwinds
Atmos Energy faces strong competition from other suppliers of natural gas and alternative fuels to industrial customers. Additionally, 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.
NiSource’ long-term (three to five year) earnings growth rate is pinned at 6.9%. The Zacks Consensus Estimate for NI’s 2023 earnings per share (EPS) indicates an increase of 6.8%.
NJR’s long-term earnings growth rate is pegged at 6%. The Zacks Consensus Estimate for NJR’s 2023 EPS implies an improvement of 5.6%.
OGE Energy’s long-term earnings growth rate is pinned at 17.89%. It delivered an average earnings surprise of 19.92% in the previous four quarters.
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Atmos Energy (ATO) Rides on Investments & Customer Additions
Atmos Energy Corporation’s (ATO - Free Report) long-term investment plan is expected to help increase the safety and reliability of its natural gas pipelines. The company gains from industrial customer additions and constructive rate outcomes. ATO’s steady performance has enabled it to reward shareholders through 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 sturdy capital expenditure plan that helps it in increasing the safety and reliability of its natural gas pipelines. A major portion of this planned capital expenditure is utilized to improve the safety and dependability of ATO’s distribution and transportation systems. In the fiscal second quarter of 2023, the company’s capital spending amounted to $1.4 billion, 86% of which was allocated to safety and reliability. In fiscal 2023, the company plans to invest $2.7 billion to further strengthen its operation.
Courtesy of constructive regulatory mechanism, more than 90% of Atmos Energy’s annual capital investments start earning returns within six months and nearly 99% within no more than 12 months.
The company benefits from industrial customer additions and constructive rate outcomes. Operating income is driven by industrial customer base expansion. Atmos Energy expects to add nearly 15 billion cubic feet to its annual demand once its 30 new industrial customers become fully operational.
Headwinds
Atmos Energy faces strong competition from other suppliers of natural gas and alternative fuels to industrial customers. Additionally, 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 sector are NiSource Inc. (NI - Free Report) , NewJersey Resources (NJR - Free Report) and OGE Energy Corp. (OGE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NiSource’ long-term (three to five year) earnings growth rate is pinned at 6.9%. The Zacks Consensus Estimate for NI’s 2023 earnings per share (EPS) indicates an increase of 6.8%.
NJR’s long-term earnings growth rate is pegged at 6%. The Zacks Consensus Estimate for NJR’s 2023 EPS implies an improvement of 5.6%.
OGE Energy’s long-term earnings growth rate is pinned at 17.89%. It delivered an average earnings surprise of 19.92% in the previous four quarters.