We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ATO or NWN: Which Utility Stock Is Better Positioned for Investors?
Read MoreHide Full Article
Key Takeaways
EPS estimate for Atmos Energy rose 1% to $7.33, while that for Northwest Natural increased 1.4% to $2.92.
ATO's current ratio of 1.37 and debt-to-capital of 40.21% outpace NWN's weaker financial metrics.
In the past month, ATO shares have climbed 7% compared with NWN's 2% and the industry's 3.9% growth.
Natural gas is increasingly being used in power generation due to its relatively cleaner-burning characteristics compared to other fossil fuels. As a result of greater LNG exports and public awareness of decreased emissions, the nation has seen an increase in domestic natural gas output. The growing demand for natural gas across different consumer categories will require the installation of more distribution pipes.
Natural gas distribution pipelines are essential for transporting natural gas via small-diameter pipelines from intrastate and interstate transmission networks to end users. Nearly 3 million mainline and other pipes make up the natural gas network in the United States. The increasing use of natural gas is driving the need for distribution pipes.
In order to repair and maintain a vast network of pipes as well as address aged infrastructure, the natural gas pipeline industry needs a consistent flow of funds. Capital-intensive utility operators will benefit from interest rate cuts and continue their capital expenditures with reduced capital servicing expenses.
According to a U.S. Energy Information Administration (“EIA”) report, dry natural gas production rose more than 1 billion cubic feet per day (Bcf/d) from the first to the second quarter of 2025, but is expected to fall a similar amount over the coming year. Rising natural gas production in recent months has added to higher-than-anticipated inventory levels. EIA also expects marketed natural gas production to grow 3% over 2024 volumes.
The Zacks Consensus Estimate for Atmos Energy’s fiscal 2025 earnings per share (EPS) has increased 1% to $7.33 in the past 30 days.
The Zacks Consensus Estimate for Northwest Natural’s 2025 EPS has increased 1.4% to $2.92 in the past 30 days.
ATO & NWN’s Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, ATO and NWN’s ROE is 9% and 8.6%, respectively, compared with the industry’s 9.08%.
ATO & NWN’s Liquidity
A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary. The current ratios of ATO and NWN are 1.37 and 0.68, respectively, compared with the industry’s average of 0.54.
Debt Position of ATO & NWN
The debt-to-capital ratio is a vital indicator of the financial position of a company. The indicator shows the amount of debt used to run a business. Atmos Energy and Northwest Natural have a debt-to-capital of 40.21% and 62.05%, respectively, compared with the industry’s 51.09%.
ATO & NWN Stock Price Performance
In the past month, ATO’s shares have risen 7% compared with the industry's growth of 3.9%. Shares of NWN have risen 2% in the same time frame.
Image Source: Zacks Investment Research
ATO & NWN’s Dividend Yield
Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for Atmos Energy is 2.1%, while the same for Northwest Natural is 4.74%. The dividend yields of both companies are better than the Zacks S&P 500 composite’s average of 1.15%.
Outcome
Atmos Energy and Northwest Natural are both well-positioned stocks that would be wise additions to any portfolio. Both have the capacity to expand further and boost their overall performance. However, our choice at this moment is ATO, given its better debt management, liquidity and price performance than NWN.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ATO or NWN: Which Utility Stock Is Better Positioned for Investors?
Key Takeaways
Natural gas is increasingly being used in power generation due to its relatively cleaner-burning characteristics compared to other fossil fuels. As a result of greater LNG exports and public awareness of decreased emissions, the nation has seen an increase in domestic natural gas output. The growing demand for natural gas across different consumer categories will require the installation of more distribution pipes.
Natural gas distribution pipelines are essential for transporting natural gas via small-diameter pipelines from intrastate and interstate transmission networks to end users. Nearly 3 million mainline and other pipes make up the natural gas network in the United States. The increasing use of natural gas is driving the need for distribution pipes.
In order to repair and maintain a vast network of pipes as well as address aged infrastructure, the natural gas pipeline industry needs a consistent flow of funds. Capital-intensive utility operators will benefit from interest rate cuts and continue their capital expenditures with reduced capital servicing expenses.
According to a U.S. Energy Information Administration (“EIA”) report, dry natural gas production rose more than 1 billion cubic feet per day (Bcf/d) from the first to the second quarter of 2025, but is expected to fall a similar amount over the coming year. Rising natural gas production in recent months has added to higher-than-anticipated inventory levels. EIA also expects marketed natural gas production to grow 3% over 2024 volumes.
In this article, we run a comparative analysis on two Utility - Gas Distribution companies — Atmos Energy (ATO - Free Report) and Northwest Natural (NWN - Free Report) .
Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Do Zacks Estimates Compare for ATO & NWN?
The Zacks Consensus Estimate for Atmos Energy’s fiscal 2025 earnings per share (EPS) has increased 1% to $7.33 in the past 30 days.
The Zacks Consensus Estimate for Northwest Natural’s 2025 EPS has increased 1.4% to $2.92 in the past 30 days.
ATO & NWN’s Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, ATO and NWN’s ROE is 9% and 8.6%, respectively, compared with the industry’s 9.08%.
ATO & NWN’s Liquidity
A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary. The current ratios of ATO and NWN are 1.37 and 0.68, respectively, compared with the industry’s average of 0.54.
Debt Position of ATO & NWN
The debt-to-capital ratio is a vital indicator of the financial position of a company. The indicator shows the amount of debt used to run a business. Atmos Energy and Northwest Natural have a debt-to-capital of 40.21% and 62.05%, respectively, compared with the industry’s 51.09%.
ATO & NWN Stock Price Performance
In the past month, ATO’s shares have risen 7% compared with the industry's growth of 3.9%. Shares of NWN have risen 2% in the same time frame.
Image Source: Zacks Investment Research
ATO & NWN’s Dividend Yield
Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for Atmos Energy is 2.1%, while the same for Northwest Natural is 4.74%. The dividend yields of both companies are better than the Zacks S&P 500 composite’s average of 1.15%.
Outcome
Atmos Energy and Northwest Natural are both well-positioned stocks that would be wise additions to any portfolio. Both have the capacity to expand further and boost their overall performance. However, our choice at this moment is ATO, given its better debt management, liquidity and price performance than NWN.