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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 operations 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 nearly 1% in the past 60 days to $3.88.

The Zacks Consensus Estimate for fourth-quarter 2024 sales is pinned at $655.26 million, indicating a year-over-year increase of 8.1%.

OGS’ long-term (three to five years) earnings growth rate is 2.89%.

Debt Position of OGS

Currently, ONE Gas’ total debt to capital is 43.44%, better than the industry’s average of 50.49%.

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 investments in a fully regulated company and OGS’ ability to generate sufficient cash flows should support management’s plans of rewarding its shareholders with an average annual dividend increase of 1-2% through 2028, subject to the board of directors' approval. 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 3.88%, better than the Zacks S&P 500 composite’s 1.22%.

OGS’ Systematic Investments & Customer Growth

ONE Gas’ 2025 capital investment, including asset removal costs, is expected to be $750 million. Capital investments for extensions to new customers are expected to be nearly $180 million, primarily due to continued growth opportunities in Texas and Oklahoma.

OGS expects its capital expenditure for the 2025-2029 period to be $4 billion or $750-$850 million per year.

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 of 2024, OGS’ average customer count included nearly 16,000 new connections.

OGS’ Price Performance

In the past six months, the stock has risen 12.2% compared with the industry’s 9.9% growth.

 

Zacks Investment Research
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) , sporting a Zacks Rank #1 (Strong Buy) at present, and Atmos Energy (ATO - Free Report) and NiSource (NI - Free Report) , both holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NJR’s fiscal 2025 EPS indicates year-over-year growth of 5.8%. The Zacks Consensus Estimate for sales indicates an improvement of 2.5% from the previous year’s registered figure.  

ATO’s long-term earnings growth rate is 7.01%. The company delivered an average earnings surprise of 3.4% for the trailing four quarters.

NI’s long-term earnings growth rate is 7.45%. The Zacks Consensus Estimate for 2024 EPS indicates year-over-year growth of 8.1%.

 


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