Earnings estimates for Atmos Energy Corporation (ATO - Free Report) have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2018 earnings has moved 0.5% north to $3.99 per share.
Atmos Energy, along with subsidiaries, is engaged in regulated natural gas distribution and storage business. The company serves in excess of three million natural gas distribution customers across more than 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. The company operates more than 75,000 miles of pipeline and distribution lines.
Let’s focus on the factors that make Atmos Energy a profitable stock to retain for greater returns.
Price Appreciation: Shares of Atmos Energy have gained 9.4% over the past month compared with the industry’s rise of 6%. The stock carries a Zacks Rank #2 (Buy).
Positive Earnings Surprise History: Atmos Energy’s average four-quarter positive earnings surprise stands at 8.7%, beating three of the trailing four quarters.
Capex Plan: The company has a disciplined capital expenditure plan in place to help it drive safety and reliability of its natural gas pipelines. Its total outlay for fiscal 2018 is fixed at $1.4 billion, of which, $1.2 billion will be invested in increasing systems and pipeline integrity through replacement of pipelines, leak repairs and cathodic protection.
Also, its long-term capital expenditure plans call for investment to the tune of $8 billion over the next five years across the company. Nearly 95% of Atmos Energy’s annual capital investments is expected to start earning returns within six months.
Dividend Growth: The company continues to add shareholder value in the form of regular dividend payouts. On May 1, 2018, the company’s Board of Directors approved a 7.8% hike in annual dividend, marking its 34th consecutive year of dividend raise.
Given the solid capex plans, accentuated by addition of customers and rise in consumption, the company might continue with its annual dividend-increase policy over the long run.
Other Stocks to Consider
Some other top-ranked stocks from the Zack Utility Sector are Ameren Corporation (AEE - Free Report) , Avangrid, Inc. (AGR - Free Report) and NiSource, Inc. (NI - Free Report) , each holding a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Ameren came up with an average four-quarter earnings surprise of 7.69%, beating the Zacks Consensus Estimate in three of the trailing four quarters. The company’s earnings are anticipated to increase 6.5% over the period of 3-5 years.
Avangrid pulled off an average four-quarter positive surprise of 7.79%, surpassing estimates in three of the trailing four quarters. The company’s earnings are expected to grow 9.1% over the long-term period.
NiSource delivered an average four-quarter beat of 0.78%, outpacing expectations in all the last four quarters. The company’s earnings are projected to gain 5.5% over the 3-5 year period.
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