Piedmont Natural Gas (NYSE: PNY) and Atmos Energy Corporation (NYSE:ATO) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitabiliy.

Profitability

This table compares Piedmont Natural Gas and Atmos Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piedmont Natural Gas 19.00% 22.34% 6.57%
Atmos Energy Corporation N/A 10.59% 3.80%

Volatility & Risk

Piedmont Natural Gas has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Atmos Energy Corporation has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Institutional & Insider Ownership

61.5% of Piedmont Natural Gas shares are owned by institutional investors. Comparatively, 72.1% of Atmos Energy Corporation shares are owned by institutional investors. 1.4% of Piedmont Natural Gas shares are owned by insiders. Comparatively, 1.6% of Atmos Energy Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Piedmont Natural Gas and Atmos Energy Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piedmont Natural Gas N/A N/A N/A $1.72 34.90
Atmos Energy Corporation $3.45 billion 2.70 $1.03 billion $3.74 23.42

Atmos Energy Corporation has higher revenue and earnings than Piedmont Natural Gas. Atmos Energy Corporation is trading at a lower price-to-earnings ratio than Piedmont Natural Gas, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Piedmont Natural Gas and Atmos Energy Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piedmont Natural Gas 0 0 0 0 N/A
Atmos Energy Corporation 1 0 3 0 2.50

Atmos Energy Corporation has a consensus target price of $86.25, suggesting a potential downside of 1.53%. Given Atmos Energy Corporation’s higher probable upside, analysts plainly believe Atmos Energy Corporation is more favorable than Piedmont Natural Gas.

Dividends

Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Piedmont Natural Gas pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Atmos Energy Corporation pays out 48.1% of its earnings in the form of a dividend. Piedmont Natural Gas has raised its dividend for 34 consecutive years and Atmos Energy Corporation has raised its dividend for 38 consecutive years.

Summary

Atmos Energy Corporation beats Piedmont Natural Gas on 8 of the 13 factors compared between the two stocks.

Piedmont Natural Gas Company Profile

Piedmont Natural Gas Company, Inc. is an energy services company. The Company’s principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities, which are its wholesale customers. The Company operates through three segments: regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a natural gas distribution system. The regulated non-utility activities segment consists of its equity method investments in regulated energy-related joint ventures that are held by its subsidiaries. The unregulated non-utility activities segment consists primarily of its equity method investment in an unregulated energy-related joint venture that is held by its subsidiary.

Atmos Energy Corporation Company Profile

Atmos Energy Corporation is engaged primarily in the regulated natural gas distribution and pipeline businesses, as well as other nonregulated natural gas businesses. The Company operates through three segments: regulated distribution segment, which includes its regulated distribution and related sales operations; regulated pipeline segment, which includes the pipeline and storage operations of its Atmos Pipeline-Texas Division, and nonregulated segment, which includes its nonregulated natural gas management, nonregulated natural gas transmission, storage and other services. The Company’s nonregulated businesses provide natural gas management, marketing, transportation and storage services to municipalities, local gas distribution companies, including certain of its natural gas distribution divisions and industrial customers principally in the Midwest and Southeast.

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