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Can Infrastructure Investments Drive Atmos Energy's Long-Term Growth?
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Key Takeaways
Atmos Energy plans about $26 billion in capital spending through fiscal 2030, with over 80% for safety.
Texas pipeline projects aim to boost Dallas-Fort Worth capacity, with service targeted by year-end 2026.
ATO has implemented $396.1 million in annualized rate increases, with $334.1 million more pending.
Atmos Energy (ATO - Free Report) is benefiting from strategic investments in its natural gas infrastructure. Strategic investments improve system reliability, expand capacity and support growing demand across its service territories.
In the first nine months of fiscal 2026, ATO invested nearly $3.1 billion to upgrade and expand its infrastructure. The company expects to spend about $4.2 billion in fiscal 2026 and approximately $26 billion through fiscal 2030, with more than 80% allocated to safety and reliability projects. Atmos expects fiscal 2026 earnings of $8.40-$8.50 and projects 6-8% EPS growth going forward.
In Texas, Atmos Pipeline-Texas is advancing projects to strengthen capacity around the growing Dallas-Fort Worth Metroplex. These include two projects totaling 29 miles of 36-inch pipeline, a bilateral compressor station in Carthage and the final 15-mile phase of the WA Loo. The projects are scheduled to enter service by the end of calendar year 2026.
ATO spends heavily to upgrade its gas network, while favorable regulation allows it to recover those investments relatively quickly through customer rates. This supports earnings and cash generation, which can help fund additional infrastructure investments. As of Aug. 5, 2026, the company had implemented $396.1 million in annualized rate increases during fiscal 2026, while seven pending regulatory filings seek nearly $334.1 million in additional rate increases.
Load growth should create additional demand for infrastructure while providing opportunities to recover investments through regulated rates. Overall, sustained capital investment, customer growth and regulatory recovery should drive ATO’s long-term earnings growth.
Capital Spending Supporting Utility Expansion
Capital spending enables regulated gas utilities to modernize aging infrastructure, improve safety and reliability, and expand networks to serve growing customer demand. These investments also create opportunities to strengthen long-term utility operations and support growth through infrastructure development and regulatory recovery.
MDU Resources (MDU - Free Report) expects to invest nearly $529 million in 2026 and about $3.1 billion through 2030 to upgrade infrastructure, accommodate rising demand and strengthen system reliability.
Southwest Gas Holdings (SWX - Free Report) expects about $1.25 billion in 2026 capital expenditures and $6.3 billion through 2030 to modernize infrastructure and support customer growth demand.
The Zacks Rundown on ATO
ATO’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 13.14% and 6.77%, respectively.
Image Source: Zacks Investment Research
Debt to Capital
Atmos Energy's debt-to-capital currently stands at 40.36%, lower than the Zacks Utility-Gas Distribution industry's 54.43%.
Image Source: Zacks Investment Research
ATO’s Stock Price Performance
In the past year, the company’s shares have risen 0.4% compared with the industry’s 6.2% growth.
View the Zacks #1 Rank List
Image: Bigstock
Can Infrastructure Investments Drive Atmos Energy's Long-Term Growth?
Key Takeaways
Atmos Energy (ATO - Free Report) is benefiting from strategic investments in its natural gas infrastructure. Strategic investments improve system reliability, expand capacity and support growing demand across its service territories.
In the first nine months of fiscal 2026, ATO invested nearly $3.1 billion to upgrade and expand its infrastructure. The company expects to spend about $4.2 billion in fiscal 2026 and approximately $26 billion through fiscal 2030, with more than 80% allocated to safety and reliability projects. Atmos expects fiscal 2026 earnings of $8.40-$8.50 and projects 6-8% EPS growth going forward.
In Texas, Atmos Pipeline-Texas is advancing projects to strengthen capacity around the growing Dallas-Fort Worth Metroplex. These include two projects totaling 29 miles of 36-inch pipeline, a bilateral compressor station in Carthage and the final 15-mile phase of the WA Loo. The projects are scheduled to enter service by the end of calendar year 2026.
ATO spends heavily to upgrade its gas network, while favorable regulation allows it to recover those investments relatively quickly through customer rates. This supports earnings and cash generation, which can help fund additional infrastructure investments. As of Aug. 5, 2026, the company had implemented $396.1 million in annualized rate increases during fiscal 2026, while seven pending regulatory filings seek nearly $334.1 million in additional rate increases.
Load growth should create additional demand for infrastructure while providing opportunities to recover investments through regulated rates. Overall, sustained capital investment, customer growth and regulatory recovery should drive ATO’s long-term earnings growth.
Capital Spending Supporting Utility Expansion
Capital spending enables regulated gas utilities to modernize aging infrastructure, improve safety and reliability, and expand networks to serve growing customer demand. These investments also create opportunities to strengthen long-term utility operations and support growth through infrastructure development and regulatory recovery.
MDU Resources (MDU - Free Report) expects to invest nearly $529 million in 2026 and about $3.1 billion through 2030 to upgrade infrastructure, accommodate rising demand and strengthen system reliability.
Southwest Gas Holdings (SWX - Free Report) expects about $1.25 billion in 2026 capital expenditures and $6.3 billion through 2030 to modernize infrastructure and support customer growth demand.
The Zacks Rundown on ATO
ATO’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 13.14% and 6.77%, respectively.
Image Source: Zacks Investment Research
Debt to Capital
Atmos Energy's debt-to-capital currently stands at 40.36%, lower than the Zacks Utility-Gas Distribution industry's 54.43%.
Image Source: Zacks Investment Research
ATO’s Stock Price Performance
In the past year, the company’s shares have risen 0.4% compared with the industry’s 6.2% growth.
Image Source: Zacks Investment Research
ATO’s Zacks Rank
Atmos Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.