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Why Atmos Energy Stock Deserves a Spot in Your Portfolio Right Now
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Key Takeaways
ATO expects fiscal 2025 sales of $4.80B, up 15.3%, and EPS of $7.24, up 0.3% in the last 60 days.
ATO plans $24B in infrastructure investments through 2029 and gained 20 new industrial customers in 2025.
ATO's ROIC of 3.25% exceeds the industry average of 2.62%, signaling strong investment returns.
Atmos Energy Corporation (ATO - Free Report) is well-positioned to gain from growing natural gas demand, supported by a steadily expanding customer base. The company’s planned investments aim to enhance the reliability of its natural gas pipelines and support stronger operational performance. Given its strong growth, ATO makes for a solid investment option in the Zacks Utility Gas Distribution industry.
Let us focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
ATO’s Growth Outlook & Surprise History
The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has increased 0.3% to $7.24 in the past 60 days.
The Zacks Consensus Estimate for fiscal 2025 sales is pegged at $4.80 billion, implying a year-over-year increase of 15.3%.
The company’s long-term (three to five years) earnings growth rate is 7.2%. ATO surpassed expectations in the last four reported quarters and delivered an average earnings surprise of 2.59%.
ATO Returns Better Than Industry
Atmos Energy’s return on invested capital (ROIC) has outperformed the industry average in the trailing 12 months. Currently, ATO’s ROIC is 3.25% compared with the industry average of 2.62%. The ROIC evaluates a company's ability to earn returns on its investments.
ATO’s Strategic Spending & Customer Expansion
Atmos Energy maintains a solid capital expenditure strategy aimed at enhancing the safety and reliability of its natural gas pipeline system. ATO projects $3.7 billion in capital spending for fiscal 2025 and intends to invest $24 billion from fiscal 2025 through 2029 to reinforce its infrastructure and operational capabilities.
In the fiscal second quarter of 2025, ATO allocated close to $225 million to expand its customer base. During the same period, it added nine new industrial customers with an anticipated annual load of 8 billion cubic feet (Bcf) once they are fully operational.
In the fiscal year-to-date period, ATO has gained 20 new industrial customers, which is expected to increase the annual load by 11 Bcf once fully operational. On a volumetric basis, this equates to adding roughly 204,000 residential customers.
ATO’s Return to Shareholders
ATO has been increasing shareholder value via regular dividend payments. Currently, the company’s quarterly dividend is 87 cents per share, resulting in an annualized dividend of $3.48. The company’s current dividend yield is 2.29%, better than the Zacks S&P 500 Composite’s 1.19%.
Atmos Energy aims to increase its dividend by 6-8% per year through fiscal 2026, subject to approval by the board of directors.
Overview of ATO’s Debt Structure
Currently, ATO’s total debt to capital is 39.30%, better than the industry’s average of 50.49%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2025 was 8.5. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
ATO Stock Price Performance
In the past six months, ATO shares have risen 10.9% compared with the industry’s growth of 3.1%.
UGI’s long-term earnings growth rate is 5.2%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.13, which indicates a year-over-year improvement of 2.3%.
OGS’ long-term earnings growth rate is 5.6%. The Zacks Consensus Estimate for 2025 EPS is pegged at $4.29, which calls for a year-over-year improvement of 9.7%.
NWN delivered an average earnings surprise of 15.05% in the past four quarters. The Zacks Consensus Estimate for 2025 EPS is pegged at $2.88, which suggests a year-over-year rise of 23.6%.
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Why Atmos Energy Stock Deserves a Spot in Your Portfolio Right Now
Key Takeaways
Atmos Energy Corporation (ATO - Free Report) is well-positioned to gain from growing natural gas demand, supported by a steadily expanding customer base. The company’s planned investments aim to enhance the reliability of its natural gas pipelines and support stronger operational performance. Given its strong growth, ATO makes for a solid investment option in the Zacks Utility Gas Distribution industry.
Let us focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
ATO’s Growth Outlook & Surprise History
The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has increased 0.3% to $7.24 in the past 60 days.
The Zacks Consensus Estimate for fiscal 2025 sales is pegged at $4.80 billion, implying a year-over-year increase of 15.3%.
The company’s long-term (three to five years) earnings growth rate is 7.2%. ATO surpassed expectations in the last four reported quarters and delivered an average earnings surprise of 2.59%.
ATO Returns Better Than Industry
Atmos Energy’s return on invested capital (ROIC) has outperformed the industry average in the trailing 12 months. Currently, ATO’s ROIC is 3.25% compared with the industry average of 2.62%. The ROIC evaluates a company's ability to earn returns on its investments.
ATO’s Strategic Spending & Customer Expansion
Atmos Energy maintains a solid capital expenditure strategy aimed at enhancing the safety and reliability of its natural gas pipeline system. ATO projects $3.7 billion in capital spending for fiscal 2025 and intends to invest $24 billion from fiscal 2025 through 2029 to reinforce its infrastructure and operational capabilities.
In the fiscal second quarter of 2025, ATO allocated close to $225 million to expand its customer base. During the same period, it added nine new industrial customers with an anticipated annual load of 8 billion cubic feet (Bcf) once they are fully operational.
In the fiscal year-to-date period, ATO has gained 20 new industrial customers, which is expected to increase the annual load by 11 Bcf once fully operational. On a volumetric basis, this equates to adding roughly 204,000 residential customers.
ATO’s Return to Shareholders
ATO has been increasing shareholder value via regular dividend payments. Currently, the company’s quarterly dividend is 87 cents per share, resulting in an annualized dividend of $3.48. The company’s current dividend yield is 2.29%, better than the Zacks S&P 500 Composite’s 1.19%.
Atmos Energy aims to increase its dividend by 6-8% per year through fiscal 2026, subject to approval by the board of directors.
Overview of ATO’s Debt Structure
Currently, ATO’s total debt to capital is 39.30%, better than the industry’s average of 50.49%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2025 was 8.5. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
ATO Stock Price Performance
In the past six months, ATO shares have risen 10.9% compared with the industry’s growth of 3.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are UGI Corporation (UGI - Free Report) , which sports a Zacks Rank #1 (Strong Buy), and ONE Gas, Inc. (OGS - Free Report) and Northwest Natural Holding Company (NWN - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
UGI’s long-term earnings growth rate is 5.2%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.13, which indicates a year-over-year improvement of 2.3%.
OGS’ long-term earnings growth rate is 5.6%. The Zacks Consensus Estimate for 2025 EPS is pegged at $4.29, which calls for a year-over-year improvement of 9.7%.
NWN delivered an average earnings surprise of 15.05% in the past four quarters. The Zacks Consensus Estimate for 2025 EPS is pegged at $2.88, which suggests a year-over-year rise of 23.6%.