Atmos Energy Corporation’s (ATO – Free Report) long-term investment plans should further increase the safety and reliability of its natural gas pipelines along with the company’s distribution and transportation systems.
Solid contributions from residential customers help boost the company’s top line. Given its growth opportunities, ATO makes for a solid investment option in the utility sector.
Let us focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
ATO Stock’s Growth Projections & Surprise History
The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has increased 0.3% to $7.17 in the past 60 days.
The Zacks Consensus Estimate for fiscal 2025 sales is pinned at $5.07 billion, implying a year-over-year increase of 21.61%.
The company’s long-term (three to five-year) earnings growth rate is 7.01%. It delivered an average earnings surprise of 3.39% in the trailing four quarters.
ATO’s Solvency
Currently, ATO’s total debt to capital is 39.27%, better than the industry’s average of 49.52%. This ratio determines the proportion of a business’s total capital that is financed using debt. A lower ratio implies that the company can pay for capital without relying on debt.
Dividend History of ATO Stock
ATO has been increasing its shareholder value via regular dividend payments. The current annual dividend of the company is $3.48 per share.
Atmos Energy aims to increase its dividend by 6-8% per year through fiscal 2026, subject to the approval of the board of directors. Its current dividend yield is 2.51%, better than the Zacks S&P 500 composite’s 1.57%.
ATO’s Systematic Investments
The company’s systematic capital expenditure plan toward the enhancement of the safety and reliability of its natural gas pipelines helps serve ATO’s expanding customer base more efficiently.
ATO expects $3.7 billion in capital expenditures during fiscal 2025. The company also plans to invest $24 billion during fiscal 2025-2029 to strengthen its operations. The planned investment should result in 6-8% annual earnings growth during the aforementioned period.
ATO’s Price Performance
In the past six months, Atmos Energy’s shares have risen 23.1% compared with the industry’s 21% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are Vistra Corp. (VST – Free Report) , New Jersey Resources (NJR – Free Report) and NiSource (NI – Free Report) . VST and NJR each sports a Zacks Rank #1 (Strong Buy) and NI holds a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
VST’s long-term (three to five years) earnings growth rate is 17.4%. The Zacks Consensus Estimate for 2025 earnings per share indicates an increase of 7.7% in the past 60 days.
The Zacks Consensus Estimate for NJR’s fiscal 2025 EPS indicates an increase of 7.3% in the past 60 days. The Zacks Consensus Estimate for NJR’s fiscal 2025 sales indicates an increase of 2.52% from the previous year’s registered figure.
NI’s long-term earnings growth rate is 7.45%. The Zacks Consensus Estimate for 2025 EPS indicates an increase of 0.5% in the past 60 days. NI reported an average surprise of 22.43% in the last four quarters.
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