Stock of the Day

August 17, 2022

Atmos Energy (ATO)

$149.87
+$2.25 (+1.5%)
Market Cap: $23.43B

About Atmos Energy

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States. It operates through two segments, Distribution, and Pipeline and Storage. The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately 3.3 million residential, commercial, public authority, and industrial customers; and owned 73,689 miles of underground distribution and transmission mains. The Pipeline and Storage segment engages in the pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage facilities in Texas; provides ancillary services customary to the pipeline industry, including parking arrangements, lending, and inventory sales; and owned 5,645 miles of gas transmission lines. Atmos Energy Corporation was founded in 1906 and is headquartered in Dallas, Texas.

Atmos Energy Bull Case

Here are some ways that investors could benefit from investing in Atmos Energy Co.:

  • The current stock price is $148.12, which reflects a strong performance and positions the company favorably in the market.
  • Atmos Energy Co. has a solid dividend yield of 2.35%, providing investors with a reliable income stream through its quarterly dividend of $0.87 per share.
  • The company reported earnings per share (EPS) of $2.23, exceeding analysts' expectations, indicating strong financial health and operational efficiency.
  • With a market capitalization of approximately $23.51 billion, Atmos Energy Co. is well-established, which can provide stability and lower risk for investors.
  • The average rating for Atmos Energy Co. is "Moderate Buy," with a target price of $148.75, suggesting potential for price appreciation based on analyst forecasts.

Atmos Energy Bear Case

Investors should be bearish about investing in Atmos Energy Co. for these reasons:

  • One research analyst has downgraded the stock from a "hold" to a "sell" rating, indicating potential concerns about future performance.
  • The company has a price-to-earnings (P/E) ratio of 21.10, which may be considered high compared to industry averages, suggesting that the stock could be overvalued.
  • Atmos Energy Co. has a debt-to-equity ratio of 0.66, which, while manageable, indicates that the company is somewhat reliant on debt financing, posing risks in a rising interest rate environment.
  • Recent trading activity shows fluctuations in stock price, with shares trading down to $146.67, which may indicate volatility and uncertainty in the market.
  • Despite a strong net margin of 25.90%, the company's return on equity of 8.89% may not be attractive enough for investors seeking higher returns on their investments.

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