Atmos Energy is one of the largest natural gas distributors in the US. It serves some 3 million customers across nine different states. Texas is the largest source of earnings for Atmos. Additionally, the company also has a 5700-mile gas pipeline across important shale gas formation states. Atmos Energy has a strong track record of growing earnings as well as dividends consistently. The demand for energy from gas is also expected to stay strong. Therefore, the long-term prospects of the company look bright. Investors looking to buy utilities stocks online may want to consider Atmos Energy as one of the options. The company is based out of Dallas, Texas, and is the largest natural gas-only distributor in America. It would be worth pointing out that utilities as a sector have been outperforming the benchmarks in recent weeks, and March 2021 has been a good month for stocks like Atmos Energy.
The Strengths Of Atmos Energy
Atmos Energy is a pure-play natural gas utility company. It is fully regulated and earnings close to 70% of total revenue from Texas. Atmos Energy’s business model is relatively stable, as is the case with most utilities. Demand is fairly steady, and cash flows are abundant. Atmos Energy has been able to raise its dividends for 37 years, which places the company in a rare group of consistent dividend payers. The earnings per share for Atmos Energy has grown from $2.26 in 2011 to $4.69 in 2020. The payout ratio for Atmos Energy is also quite conservative, ranging between 50% and 60% for the past decade. Given the solid fundamentals and the excellent track record, Atmos Energy is one of the best utilities stocks today.
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Atmos Energy’s stock had done quite well over the long term before the pandemic hit in March 2020. The stock had gone from around $75 in April 2016 to about $120 by February 2020. Then, the price crashed by more than 30%. The stock, by and large, made lower highs and lower lows for the remaining part of the year. However, since February 2021, utilities are on the uptick, and Atmos seems to be rising again.
