Atmos Energy Corp. ATO benefits from an expanding customer base, rising natural gas demand and newly approved rates, which boost the company’s financial performance. The company invests strategically to modernize and replace its aging transmission and distribution systems and underground storage infrastructure. This improves operational efficiency, enhances service reliability and supports long-term growth.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Projections for ATO & Surprise History
The Zacks Consensus Estimate for ATO’s fiscal 2026 and 2027 earnings have moved up 1.58% and 1.37%, respectively, in the past 60 days. The Zacks Consensus Estimate for ATO’s 2026 and 2027 sales is pinned at $5.47 billion and $6.02 billion, indicating year-over-year growth of 16.39% and 9.90%, respectively.
ATO’s long-term (three to five years) earnings growth rate is 6.82%.
ATO has surpassed earnings in the three quarters and missed earnings estimates in one of the last four reported quarters, resulting in an average positive earnings surprise 2.33%.
ATO’s Stable Investments
Atmos Energy invested $2 billion during the second quarter of fiscal 2026. Of the total spending, 89% was dedicated to infrastructure upgrades aimed at ensuring safe and reliable customer service. The company aims to invest $4.2 billion during fiscal 2026.
ATO’s Shareholder Return Program
Atmos Energy has a dividend yield of 2.25% versus the Zacks S&P 500 composite’s average of 1.42%. The company announced a dividend of $1 per share, resulting in an annualized dividend of $4, reflecting a 14.9% increase from fiscal 2025.
The company has been rewarding its shareholders with a continuous increase in dividends for 42 years. It targets nearly 6-8% dividend growth through 2030, subject to approval by the board of directors.
ATO’s Debt Position
The debt-to-capital ratio measures the proportion of a company’s total capital funded by debt, reflecting its financial leverage and long-term solvency. ATO’s total debt-to-capital is 39.24%, which is lower than the industry’s 54.47%, indicating stronger financial stability and lower leverage risk.
ATO’s time earned ratio (TIE) at the end of the fiscal second quarter of 2026 was 12.1. The TIE ratio measures a company’s ability to meet long-term debt obligations, indicating how effectively operating earnings cover interest expenses and reflecting its overall financial stability and solvency.
Price Performance of ATO
In the past three months, Atmos Energy shares have plunged 5.8% compared with the industry’s 4.2% fall.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the same sector are American States Water AWR, Duke Energy DUK and Consolidated Edison ED each carry a Zacks Rank #2 at present.
AWR, DUK and ED dividend yields are 2.65%, 3.41% and 3.30%, respectively.
The Zacks Consensus Estimate for American States Water, Duke Energy and Consolidated Edison 2026 EPS is pegged at $3.71, $6.71 and $6.09, suggesting year-over-year growth of 10.09%,6.34% and 6.84%, respectively.
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Duke Energy Corporation (DUK): Free Stock Analysis Report
Consolidated Edison Inc (ED): Free Stock Analysis Report
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American States Water Company (AWR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).