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Here's Why You Should Add Atmos Energy to Your Portfolio Right Now
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Key Takeaways
Atmos Energy benefits from rising gas demand and approved rates, driving revenue and earnings growth.
ATO plans $4.2B in FY2026 investments, with over 85% aimed at safety and system reliability upgrades.
ATO offers 2.18% yield, 42 years of dividend growth, and lower debt-to-capital than industry peers.
Atmos Energy Corp. (ATO - Free Report) benefits from rising natural gas demand and newly approved rates supporting revenue and earnings growth. The company undertakes systematic capital investments to upgrade and replace aging transmission and distribution systems, enhancing service reliability and supporting long-term growth.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
ATO’s Growth Projection & Surprise History
The Zacks Consensus Estimate for ATO’s fiscal 2026 earnings has moved up 1.73% in the past 60 days to $8.22 per share. The Zacks Consensus Estimate for ATO’s fiscal 2026 sales is pinned at $5.58 billion, indicating year-over-year growth of 18.73%.
ATO’s long-term (three to five years) earnings growth rate is 7.01%.
ATO has missed earnings estimates in one of the last four reported quarters and has surpassed earnings in the other three quarters, resulting in an average positive earnings surprise 2.53%.
ATO’s Stable Investments
Atmos Energy has invested $1.03 billion during the first quarter of fiscal 2026, 89% of which was dedicated to upgrading infrastructure to provide safe and reliable service to customers. The company plans to invest $4.2 billion during fiscal 2026 and $26 billion in fiscal 2026-2030, with more than 85% focused on improving safety and system reliability.
ATO’s Dividend History
Atmos Energy has a dividend yield of 2.16% versus the Zacks S&P 500 composite’s average of 1.51%. The company announced its dividend at $1 per share, resulting in an annualized dividend of $4 per share, reflecting a 14.9% increase from fiscal 2025.
The company has been rewarding its shareholders with a continuous increase in dividends for 42 years. It targets nearly 6-8% dividend growth through 2030, subject to approval by the board of directors.
ATO’s Debt Position
ATO’s time earned ratio (TIE) at the end of the fiscal first quarter of 2026 was 11.2. The TIE ratio measures a company’s ability to meet long-term debt obligations, indicating how effectively operating earnings cover interest expenses and reflecting its overall financial stability and solvency.
ATO’s total debt-to-capital is 40.28%, which is lower than the industry’s 55.08%, indicating stronger financial stability and lower leverage risk.
Price Performance of ATO
In the past three months, Atmos Energy shares have rallied 10.3% compared with the industry’s 7.1% growth.
Currently, CPK, NWN and OGS’ dividend yields are 2.17%, 3.67% and 3.16%, respectively.
The Zacks Consensus Estimate for Chesapeake Utilities, Northwest Natural and ONE Gas 2026 EPS is pegged at $6.51, $3.05 and $4.73, suggesting year-over-year growth of 8.32%,4.10% and 5.58%, respectively.
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Here's Why You Should Add Atmos Energy to Your Portfolio Right Now
Key Takeaways
Atmos Energy Corp. (ATO - Free Report) benefits from rising natural gas demand and newly approved rates supporting revenue and earnings growth. The company undertakes systematic capital investments to upgrade and replace aging transmission and distribution systems, enhancing service reliability and supporting long-term growth.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
ATO’s Growth Projection & Surprise History
The Zacks Consensus Estimate for ATO’s fiscal 2026 earnings has moved up 1.73% in the past 60 days to $8.22 per share. The Zacks Consensus Estimate for ATO’s fiscal 2026 sales is pinned at $5.58 billion, indicating year-over-year growth of 18.73%.
ATO’s long-term (three to five years) earnings growth rate is 7.01%.
ATO has missed earnings estimates in one of the last four reported quarters and has surpassed earnings in the other three quarters, resulting in an average positive earnings surprise 2.53%.
ATO’s Stable Investments
Atmos Energy has invested $1.03 billion during the first quarter of fiscal 2026, 89% of which was dedicated to upgrading infrastructure to provide safe and reliable service to customers. The company plans to invest $4.2 billion during fiscal 2026 and $26 billion in fiscal 2026-2030, with more than 85% focused on improving safety and system reliability.
ATO’s Dividend History
Atmos Energy has a dividend yield of 2.16% versus the Zacks S&P 500 composite’s average of 1.51%. The company announced its dividend at $1 per share, resulting in an annualized dividend of $4 per share, reflecting a 14.9% increase from fiscal 2025.
The company has been rewarding its shareholders with a continuous increase in dividends for 42 years. It targets nearly 6-8% dividend growth through 2030, subject to approval by the board of directors.
ATO’s Debt Position
ATO’s time earned ratio (TIE) at the end of the fiscal first quarter of 2026 was 11.2. The TIE ratio measures a company’s ability to meet long-term debt obligations, indicating how effectively operating earnings cover interest expenses and reflecting its overall financial stability and solvency.
ATO’s total debt-to-capital is 40.28%, which is lower than the industry’s 55.08%, indicating stronger financial stability and lower leverage risk.
Price Performance of ATO
In the past three months, Atmos Energy shares have rallied 10.3% compared with the industry’s 7.1% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the same industry are Chesapeake Utilities (CPK - Free Report) , Northwest Natural (NWN - Free Report) and ONE Gas (OGS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Currently, CPK, NWN and OGS’ dividend yields are 2.17%, 3.67% and 3.16%, respectively.
The Zacks Consensus Estimate for Chesapeake Utilities, Northwest Natural and ONE Gas 2026 EPS is pegged at $6.51, $3.05 and $4.73, suggesting year-over-year growth of 8.32%,4.10% and 5.58%, respectively.