Here's Why ATO Stock Deserves a Spot in Your Portfolio Right Now

Atmos Energy Corporation ATO has projected a clear pathway for sustained growth, supported by rising natural gas demand and customer base growth. The company focuses on long-term investments to ensure the reliability of its natural gas pipelines while simultaneously benefiting from industrial customer additions and constructive rate outcomes.

Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a strong investment pick in the Zacks Utility- Gas Distribution industry at present

ATO’s Growth Outlook & Surprise History

The Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) implies an increase of 1.8% to $8.02 in the past 60 days. 

The Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $5.81 billion, suggesting a year-over-year improvement of 23.5%.

ATO’s long-term (three to five years) earnings growth rate is 7.98%. It delivered an average earnings surprise of 2.6% in the last four quarters.

ATO’s Dividend History

Atmos Energy has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is $1.00 per share, resulting in an annualized dividend of $4.00. ATO’s current dividend yield is 2.27%, better than the Zacks S&P 500 composite's average of 1.07%.

ATO’s Investment Focus

Atmos Energy has outlined a five-year capital expenditure plan of $26 billion for fiscal 2026-2030, with $20 billion allocated to upgrading the distribution system and $6 billion allocated to modernizing the transmission system. The planned investment should result in 6-8% annual earnings growth during the period.

ATO’s Debt Position

Currently, ATO’s total debt to capital is 39.89%, better than the industry’s average of 47.36%. This implies that the company is using lower debts to run operations compared with its peers in the industry.

Atmos Energy’s times interest earned ratio (TIE) at the end of the fourth quarter of 2025 was 9.6. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

ATO’s Stock Price Performance

Over the past year, ATO’s shares have risen 18.7%, which beat the industry’s growth of 9.8%.

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Spire Global, Inc. SR, Southwest Gas Holdings, Inc. SWX and IDACORP, Inc. IDA, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SR’s long-term earnings growth rate is 10.54%. The Zacks Consensus Estimate for fiscal 2026 EPS is pegged at $5.18, which suggests year-over-year growth of 16.67%.

SWX’s long-term earnings growth rate is 13.33%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.63, which suggests year-over-year growth of 14.87%.

IDA’s long-term earnings growth rate is 8.01%. The Zacks Consensus Estimate for 2025 EPS is pegged at $5.85, which suggests year-over-year growth of 6.36%.


 

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

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