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Here's Why You Should Add ONE Gas Stock to Your Portfolio Now

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ONE Gas, Inc. (OGS - Free Report) continues to benefit from strategic investments, 100% regulated operation and an expanding customer base. Given its growth opportunities, OGS makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

OGS’ Growth Projections

The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased 0.8% in the past 30 days to $3.87.

The Zacks Consensus Estimate for fourth-quarter 2024 sales is pinned at $660.1 million, indicating a year-over-year increase of 8.9%.

OGS’ long-term (three to five years) earnings growth rate is 5%.

Debt Position of OGS

Currently, ONE Gas’ total debt to capital is 43.44%, better than the industry’s average of 49.59%.

The time-to-interest earned ratio at the end of the third quarter of 2024 was 2.9. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

OGS’ Dividend History

Regular investment in a fully regulated company and its ability to generate sufficient cash flows will support management’s plans of rewarding its shareholders with an average annual dividend increase of 1-2% through 2028, subject to the approval of the board of directors. Currently, ONE Gas’ quarterly dividend is 66 cents per share, resulting in an annualized dividend of $2.64. The company’s current dividend yield is 3.6%, better than the Zacks S&P 500 composite’s 1.19%.

OGS’ Systematic Investments

The company expects capital expenditures, including asset removal costs, to be nearly $750 million in 2024 and $4.25 billion through 2028. Nearly $3 billion of the planned capital expenditures will be directed toward system integrity and replacement projects.

OGS’ Customer Growth

ONE Gas’ 2024 total capital investments include nearly $170 million for customer growth. The company has been steadily increasing its customer base every year since 2015 and expects an average annual customer growth of 0.9% for 2024-2028 across its service territories. For the first nine months ended Sept. 30, 2024, OGS’ average customer count included nearly 16,000 new connections.

OGS’ Price Performance

In the past six months, the stock has risen 14.9% compared with the industry’s 13.4% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Atmos Energy (ATO - Free Report) , New Jersey Resources (NJR - Free Report) and NiSource (NI - 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.

ATO’s long-term earnings growth rate is 7%. The company delivered an average earnings surprise of 3.4% in the past four quarters.

The Zacks Consensus Estimate for NJR’s fiscal 2024 EPS indicates year-over-year growth of 10.1%. The Zacks Consensus Estimate for NJR’s fiscal 2024 sales indicates a decline of 7.9% from the previous year’s registered figure.  

NI’s long-term earnings growth rate is 6.95%. The Zacks Consensus Estimate for NI’s 2024 EPS indicates year-over-year growth of 8.1%.

 

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