Here Are Some Reasons to Add ATO Stock to Your Portfolio Right Now

Atmos Energy Corporation ATO benefits from strategic acquisitions, the addition of industrial customers and constructive rate outcomes, which contribute to overall revenue and profitability growth. Given its growth opportunities, ATO makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

ATO’s Growth Projections & Surprise History

The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has increased 1.2% to $7.33 in the past 90 days. 

The Zacks Consensus Estimate for fiscal 2025 sales is pinned at $4.81 billion, implying a year-over-year increase of 15.6%. 

The company’s long-term (three-to-five-year) earnings growth rate is 7.32%. It delivered an average earnings surprise of 1.7% in the trailing four quarters.

ATO’s Liquidity

Atmos Energy’s current ratio is 1.37, better than the industry’s average of 0.54. A current ratio of greater than one indicates that the company has sufficient short-term assets to cover all its short-term liabilities, if necessary.

Debt Position of ATO

Currently, ATO’s total debt to capital is 40.21%, better than the industry’s average of 51.09%. 

The time-to-interest earned ratio at the end of the fiscal third quarter of 2025 was 8.6. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

Strong Capital Investments to Drive ATO’s Earnings Growth

Atmos Energy has a robust capital expenditure plan, which helps the company enhance the safety and reliability of its natural gas pipelines. A significant portion of its planned capital expenditure is allocated to enhancing the safety and reliability of distribution and transportation systems.

ATO expects $3.7 billion in capital expenditures during fiscal 2025 and plans to invest $24 billion over the next five years to strengthen its operations. The planned investment is expected to yield 6-8% annual earnings growth during the same period.

ATO’s Dividend History

ATO has been increasing shareholder value via regular dividend payments. Currently, its quarterly dividend is 87 cents per share. This resulted in an annualized dividend of $3.48 per share compared with the previous year's $3.22. 

Atmos Energy aims to increase dividend by 6-8% per year through fiscal 2026, subject to approval by the board of directors. Its current dividend yield is 2.09%, better than the Zacks S&P 500 composite’s 1.11%.

ATO’s Stock Price Performance

In the past year, Atmos Energy’s shares have risen 20.8% compared with the industry’s 8.2% growth.   

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Northwest Natural NWN, NiSource NI and Exelon Corporation EXC, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for NWN’s 2025 EPS indicates year-over-year growth of 25.3%. The company delivered an average earnings surprise of 33.2% for the trailing four quarters.

NI’s long-term earnings growth rate is 7.88%. The Zacks Consensus Estimate for 2025 EPS is pinned at $1.88, which indicates year-over-year growth of 7.4%.  

EXC’s long-term earnings growth rate is 6.34%. The company delivered an average earnings surprise of 7% in the last four quarters. 

 

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This article originally published on Zacks Investment Research (zacks.com).

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