Utilities are considered to be a relatively “safe” investment when it comes to comparing various sectors. Utilities enjoy exclusive rights to service certain geographies, have long-term agreements with local government bodies, and do not face much volatility regarding demand variability. Utilities also do not enjoy high growth rates and tend to compound at rather slow rates. However, because of the general stability in its business model, utility stocks tend to have stable cash flows and pay decent dividends. The transition from fossil-fuel-based energy to green energy can potentially affect many utility companies. However, Atmos Energy is a pure-play natural gas distributor. It has enjoyed reasonable success in recent years. The company could be interesting for an investor looking for top utilities stock to buy right now.
Atmos Reports Q12021 Earnings Results
On 3rd February 2021, Atmos Energy reported its first-quarter 2021 earnings results. Net income was up from $179 million in Q12020 to $218 million in Q12021. Diluted earnings per share were also up from $1.47 in Q12020 to $1.71 in Q12021. The company’s management perceived to be positive as factors like customer growth, lower O&M spending, and system modernization spending were all responsible for driving the business. Simultaneously, the distribution and pipeline & storage segments saw some increases in their respective rates. Atmos Energy is planning to invest around $11-12 billion over the next five years. It is among the top utilities stocks for investors looking to participate in the sector’s recent resurgence.
Atmos Energy closed at $98.62 on 5th April 2021. The stock was trading at a 2.53% dividend yield at that time. Atmos has grown steadily from around $35 ten years ago to almost $100 currently. In fact, the stock price had reached a peak of $120 in early 2020 before the March 2020 crash brought the price down. The downtrend has lasted for almost a year until prices started trending up in March 2020.