Financial Analysis: Atmos Energy Corporation (ATO) vs. Piedmont Natural Gas (PNY)
Atmos Energy Corporation (NYSE: ATO) and Piedmont Natural Gas (NYSE:PNY) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
This table compares Atmos Energy Corporation and Piedmont Natural Gas’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Atmos Energy Corporation||N/A||10.59%||3.80%|
|Piedmont Natural Gas||-3.98%||-1.90%||-0.55%|
This is a breakdown of recent ratings and target prices for Atmos Energy Corporation and Piedmont Natural Gas, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Atmos Energy Corporation||1||0||3||0||2.50|
|Piedmont Natural Gas||0||0||0||0||N/A|
Atmos Energy Corporation presently has a consensus target price of $86.25, indicating a potential downside of 1.74%. Given Atmos Energy Corporation’s higher possible upside, equities research analysts plainly believe Atmos Energy Corporation is more favorable than Piedmont Natural Gas.
Risk & Volatility
Atmos Energy Corporation has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Piedmont Natural Gas has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.
Institutional and Insider Ownership
71.0% of Atmos Energy Corporation shares are owned by institutional investors. Comparatively, 61.5% of Piedmont Natural Gas shares are owned by institutional investors. 1.6% of Atmos Energy Corporation shares are owned by company insiders. Comparatively, 1.4% of Piedmont Natural Gas shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. Atmos Energy Corporation pays out 48.1% of its earnings in the form of a dividend. 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 has increased its dividend for 34 consecutive years and Piedmont Natural Gas has increased its dividend for 38 consecutive years. Piedmont Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Atmos Energy Corporation and Piedmont Natural Gas’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Atmos Energy Corporation||$3.62 billion||2.57||$1.04 billion||$3.74||23.47|
|Piedmont Natural Gas||N/A||N/A||N/A||$1.72||34.90|
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.
Atmos Energy Corporation beats Piedmont Natural Gas on 10 of the 13 factors compared between the two stocks.
About Atmos Energy Corporation
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.
About Piedmont Natural Gas
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.
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