Atmos Energy (ATO)
Market Price (3/7/2026): $185.025 | Market Cap: $30.1 BilSector: Utilities | Industry: Gas Utilities
Atmos Energy (ATO)
Market Price (3/7/2026): $185.025Market Cap: $30.1 BilSector: UtilitiesIndustry: Gas Utilities
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.2% | Trading close to highsDist 52W High is -1.1%, Dist 3Y High is -1.1% | Expensive valuation multiplesP/SPrice/Sales ratio is 6.2x |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 16% | Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -33% | |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 33% | Key risksATO key risks include [1] executing its substantial multi-year capital expenditure program and [2] its critical dependence on timely and favorable regulatory approvals for cost recovery. | |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 43%, CFO LTM is 2.1 Bil | ||
| Low stock price volatilityVol 12M is 16% | ||
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, and Energy Transition & Decarbonization. Themes include Smart Metering, Grid Automation, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.2% |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 16% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 33% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 43%, CFO LTM is 2.1 Bil |
| Low stock price volatilityVol 12M is 16% |
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, and Energy Transition & Decarbonization. Themes include Smart Metering, Grid Automation, Show more. |
| Trading close to highsDist 52W High is -1.1%, Dist 3Y High is -1.1% |
| Expensive valuation multiplesP/SPrice/Sales ratio is 6.2x |
| Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -33% |
| Key risksATO key risks include [1] executing its substantial multi-year capital expenditure program and [2] its critical dependence on timely and favorable regulatory approvals for cost recovery. |
Qualitative Assessment
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1. Strong Financial Performance and Affirmed Positive Guidance. Atmos Energy reported robust financial results, including an earnings per share (EPS) of $1.07 for the fourth fiscal quarter of 2025 (ending September 30, 2025), surpassing the forecasted $0.95 by 12.63% and leading to a 3.04% stock price increase immediately after the announcement on November 6, 2025. The company also posted a 14.5% year-over-year increase in net income to $403 million for the first fiscal quarter of 2026 (ending December 31, 2025), with EPS of $2.44 beating consensus estimates by 1.46%. Management reaffirmed its fiscal 2026 EPS guidance in the range of $8.15 to $8.35 per diluted share and increased the annual dividend by 14.9% to $4.00 per share, marking its 23rd consecutive year of EPS growth.
2. Favorable Regulatory Environment and Strategic Capital Investments. The company benefited from constructive regulatory outcomes, implementing $333.6 million in annualized rate increases in fiscal 2025 and an additional $122.5 million in annualized regulatory outcomes in the first fiscal quarter of 2026. Texas House Bill 4384 also provided a $35 million benefit in Q1 fiscal 2026, allowing for the recovery of over 95% of capital spending within six months and 99% within 12 months. Atmos Energy plans significant capital expenditures of approximately $4.2 billion for fiscal 2026, with more than 85% dedicated to enhancing system safety and reliability, which expands its rate base and supports future earnings growth.
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Stock Movement Drivers
Fundamental Drivers
The 5.5% change in ATO stock from 11/30/2025 to 3/7/2026 was primarily driven by a 3.5% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 11302025 | 3072026 | Change |
|---|---|---|---|
| Stock Price ($) | 175.40 | 185.03 | 5.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,703 | 4,869 | 3.5% |
| Net Income Margin (%) | 25.5% | 25.7% | 0.7% |
| P/E Multiple | 23.6 | 24.1 | 2.2% |
| Shares Outstanding (Mil) | 161 | 163 | -1.0% |
| Cumulative Contribution | 5.5% |
Market Drivers
11/30/2025 to 3/7/2026| Return | Correlation | |
|---|---|---|
| ATO | 5.5% | |
| Market (SPY) | -1.6% | -2.1% |
| Sector (XLU) | 3.1% | 61.2% |
Fundamental Drivers
The 12.6% change in ATO stock from 8/31/2025 to 3/7/2026 was primarily driven by a 6.6% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 3072026 | Change |
|---|---|---|---|
| Stock Price ($) | 164.27 | 185.03 | 12.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,623 | 4,869 | 5.3% |
| Net Income Margin (%) | 25.0% | 25.7% | 2.5% |
| P/E Multiple | 22.6 | 24.1 | 6.6% |
| Shares Outstanding (Mil) | 159 | 163 | -2.1% |
| Cumulative Contribution | 12.6% |
Market Drivers
8/31/2025 to 3/7/2026| Return | Correlation | |
|---|---|---|
| ATO | 12.6% | |
| Market (SPY) | 4.5% | -5.6% |
| Sector (XLU) | 11.6% | 58.1% |
Fundamental Drivers
The 24.3% change in ATO stock from 2/28/2025 to 3/7/2026 was primarily driven by a 16.4% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 2282025 | 3072026 | Change |
|---|---|---|---|
| Stock Price ($) | 148.82 | 185.03 | 24.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,183 | 4,869 | 16.4% |
| Net Income Margin (%) | 25.9% | 25.7% | -0.9% |
| P/E Multiple | 21.5 | 24.1 | 12.2% |
| Shares Outstanding (Mil) | 156 | 163 | -3.9% |
| Cumulative Contribution | 24.3% |
Market Drivers
2/28/2025 to 3/7/2026| Return | Correlation | |
|---|---|---|
| ATO | 24.3% | |
| Market (SPY) | 14.2% | 17.7% |
| Sector (XLU) | 20.5% | 71.6% |
Fundamental Drivers
The 76.6% change in ATO stock from 2/28/2023 to 3/7/2026 was primarily driven by a 50.5% change in the company's Net Income Margin (%).| (LTM values as of) | 2282023 | 3072026 | Change |
|---|---|---|---|
| Stock Price ($) | 104.77 | 185.03 | 76.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,673 | 4,869 | 4.2% |
| Net Income Margin (%) | 17.1% | 25.7% | 50.5% |
| P/E Multiple | 18.6 | 24.1 | 29.2% |
| Shares Outstanding (Mil) | 142 | 163 | -12.8% |
| Cumulative Contribution | 76.6% |
Market Drivers
2/28/2023 to 3/7/2026| Return | Correlation | |
|---|---|---|
| ATO | 76.6% | |
| Market (SPY) | 76.0% | 19.8% |
| Sector (XLU) | 56.5% | 72.3% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ATO Return | 13% | 10% | 6% | 23% | 23% | 11% | 122% |
| Peers Return | 28% | 9% | -3% | 25% | 18% | 12% | 124% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -0% | 82% |
Monthly Win Rates [3] | |||||||
| ATO Win Rate | 42% | 58% | 67% | 58% | 75% | 33% | |
| Peers Win Rate | 53% | 57% | 57% | 60% | 60% | 67% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| ATO Max Drawdown | -11% | -5% | -7% | -4% | -2% | -1% | |
| Peers Max Drawdown | -7% | -7% | -14% | -8% | -7% | -2% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: SRE, SO, CNP, NI, NFG. See ATO Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 3/6/2026 (YTD)
How Low Can It Go
| Event | ATO | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -20.0% | -25.4% |
| % Gain to Breakeven | 25.1% | 34.1% |
| Time to Breakeven | 280 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -33.2% | -33.9% |
| % Gain to Breakeven | 49.8% | 51.3% |
| Time to Breakeven | 739 days | 148 days |
| 2018 Correction | ||
| % Loss | -15.5% | -19.8% |
| % Gain to Breakeven | 18.3% | 24.7% |
| Time to Breakeven | 150 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -39.0% | -56.8% |
| % Gain to Breakeven | 63.9% | 131.3% |
| Time to Breakeven | 680 days | 1,480 days |
Compare to SRE, SO, CNP, NI, NFG
In The Past
Atmos Energy's stock fell -20.0% during the 2022 Inflation Shock from a high on 4/20/2022. A -20.0% loss requires a 25.1% gain to breakeven.
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About Atmos Energy (ATO)
AI Analysis | Feedback
- Like Duke Energy or Xcel Energy, but focused on natural gas distribution.
- Similar to your local electric utility, but providing natural gas instead of electricity.
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- Natural Gas Distribution: Providing regulated natural gas sales and transportation services directly to residential, commercial, and industrial customers.
- Pipeline and Storage: Operating regulated interstate and intrastate natural gas transmission pipelines and storage facilities that connect natural gas supplies to distribution markets.
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Atmos Energy (symbol: ATO) is one of the largest natural gas-only distributors in the United States. The company sells primarily to end-users rather than to other companies for resale.
Atmos Energy serves the following major categories of customers:
- Residential Customers: This category includes individual households that use natural gas for heating, cooking, water heating, and other domestic purposes. These customers represent the largest number of connections for Atmos Energy across its service territories.
- Commercial Customers: This segment comprises various businesses and institutions such as restaurants, retail establishments, office buildings, schools, hospitals, and government facilities. They utilize natural gas for space heating, water heating, cooking, and various operational processes.
- Industrial Customers: This category includes large industrial facilities, manufacturing plants, and other significant enterprises that consume natural gas as a fuel for industrial processes, power generation, or as a feedstock in their operations.
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```htmlKevin Akers, President and Chief Executive Officer
Kevin Akers was named President and Chief Executive Officer in October 2019. Prior to this, he served as Executive Vice President from November 2018 to October 2019, and as Senior Vice President, Safety and Enterprise Services, from January 2017 to October 2018. Akers also held leadership positions as president of the Kentucky/Mid-States Division from May 2007 to October 2016 and president of the Mississippi Division from 2002 to 2007. He joined Atmos Energy in 1991 and previously served as a senior gas engineer for the Indiana Utility Regulatory Commission from 1989 to 1991.
Christopher T. Forsythe, Senior Vice President and Chief Financial Officer
Christopher T. Forsythe was appointed Senior Vice President and Chief Financial Officer in February 2017. He joined Atmos Energy in June 2003, progressing through roles as Director, Financial Reporting (September 2003) and Vice President and Controller (May 2009). Before his tenure at Atmos Energy, Forsythe worked as a senior manager at PricewaterhouseCoopers LLP from 1993 to 2003.
John A. Paris, President, Mid-Tex Division
John A. Paris was named President of the Mid-Tex Division in May 2007, overseeing Atmos Energy's largest division. He joined Atmos Energy in 1985 and has held various positions in operations, marketing, and engineering, including previously serving as president of the Kentucky/Mid-States Division.
Daniel M. Meziere, Vice President of Investor Relations and Treasurer
Daniel M. Meziere was named Vice President of Investor Relations and Treasurer in August 2020. He served as Vice President and Treasurer since 2011 and as Director of Accounting Services for nine years prior to that. Before joining Atmos Energy, Meziere was Vice President of Finance at Hilton Reservations Worldwide and held various roles in the energy industry for over 15 years with Oryx Energy and Santa Fe International.
Karen E. Hartsfield, Senior Vice President, General Counsel, and Corporate Secretary
Karen E. Hartsfield joined Atmos Energy in June 2015 as a Senior Attorney and was promoted to Senior Vice President, General Counsel, and Corporate Secretary in August 2017. Prior to her time at Atmos Energy, she spent 19 years in private practice, most recently as the Managing Partner of the Jackson Lewis LLP Dallas office.
```AI Analysis | Feedback
The key risks to Atmos Energy's business are primarily centered around its substantial capital expenditure plans and the regulatory environment in which it operates.
- Significant Capital Expenditure and Dependence on Regulatory Cost Recovery: Atmos Energy has embarked on an ambitious multi-year capital expenditure program, projected to be approximately $24 billion between fiscal years 2025 and 2029, primarily for modernizing and upgrading its infrastructure. This significant investment requires external funding and its success hinges on timely and favorable regulatory approvals for cost recovery and rate base growth. Should capital markets become less accommodating, or if there are delays or adverse decisions from regulatory authorities regarding rate adjustments and cost recovery, it could pressure the company's financial returns and strain its resources.
- Broader Regulatory and Legislative Changes: As a heavily regulated natural gas utility, Atmos Energy's financial performance is intrinsically linked to decisions made by regulatory bodies. Beyond capital expenditure recovery, the evolving regulatory and legislative landscape, including potential shifts in energy policy towards renewable sources and increasingly stringent environmental regulations, could challenge the company's traditional natural gas business model. Such changes could necessitate strategic adaptations to remain competitive and compliant.
- Volatility in Natural Gas Prices: While Atmos Energy generally has mechanisms to pass on the impact of fluctuating natural gas prices to its customers through rate adjustments, sudden and significant spikes in market gas prices could lead to temporary constraints on its cash flow. The company's free cash flow has notably fluctuated in the past, partly influenced by the timing of these market price movements and subsequent regulatory outcomes.
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Atmos Energy (symbol: ATO) primarily operates within two main addressable markets in the United States: natural gas distribution and natural gas pipeline and storage.
For its natural gas distribution services, the U.S. natural gas distribution market was valued at approximately $170.0 billion in 2024 and is projected to grow to $186.0 billion by 2032, with a compound annual growth rate (CAGR) of 1.0% between 2025 and 2032. Another estimate places the U.S. natural gas distribution market size at $174.7 billion in 2024 and $222.5 billion in 2025.
For its pipeline and storage businesses, the U.S. gas pipeline infrastructure market, which encompasses transmission pipelines, was valued at approximately $1,058.73 billion in 2024. This market is estimated to have grown to $1,149.26 billion in 2025 and is projected to reach around $2,431.55 billion by 2034, expanding at a CAGR of 8.67% between 2025 and 2034.
AI Analysis | Feedback
Atmos Energy (ATO) is expected to drive future revenue growth over the next 2-3 years through several key initiatives:-
Capital Investment and Rate Base Expansion
Atmos Energy has an ambitious capital expenditure program focused on modernizing its natural gas distribution, transmission, and storage systems. The company plans to invest approximately $26 billion in capital through 2030, with about 85% allocated to safety and reliability initiatives. These significant investments are expected to support a 13-15% annual rate base growth, increasing from approximately $21 billion in fiscal 2025 to $40-44 billion by fiscal 2030. A larger rate base allows Atmos Energy to request higher rates from regulators, directly contributing to earnings growth. -
Constructive Regulatory Environment and Rate Adjustments
Atmos Energy benefits from a constructive regulatory environment, particularly in Texas, where the majority of its service territory is located. This environment supports predictable cash flows and enables the company to recover costs associated with its substantial capital investment programs. The company actively pursues approximately 20 rate filings per year to implement rate adjustments and earn a fair return on its investments. Recent legislative changes, such as Texas House Bill 4384, are particularly favorable, allowing Atmos Energy to recover over 95% of its capital spending within six months and 99% within 12 months, which is expected to boost revenue and earnings. For instance, in fiscal 2025, new rates worth $333.6 million were implemented, and in year-to-date fiscal 2026, rates worth $146.3 million were implemented. -
Customer Growth
Atmos Energy continues to experience strong customer growth, which directly contributes to increased revenue. In fiscal 2024, the company added nearly 3,500 new commercial customers, a 19% increase over the prior fiscal year, and 39 industrial customers expected to consume approximately 8.4 Bcf of gas annually when fully operational. Over the past year, it has added 58,000 residential customers, with over 75% of this growth occurring in Texas. Fiscal year 2025 saw significant customer expansion, with approximately 57,000 residential customers, nearly 3,200 commercial customers, and 29 industrial customers added. This demographic growth in the regions it serves, particularly in Texas, is a positive driver for the company.
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Capital Allocation Decisions (Last 3-5 Years)
Share Issuance
- Atmos Energy entered into a $1.7 billion equity distribution agreement in December 2024, intended for capital investments and general corporate purposes.
- This agreement succeeded a prior $1 billion at-the-market offering program that concluded earlier in 2024.
- The number of shares outstanding has increased year-over-year, with 0.161 billion shares in Q2 2025, representing a 5.07% increase from 2024.
Capital Expenditures
- For fiscal year 2025, Atmos Energy's capital expenditures totaled $3.6 billion, with 87% dedicated to safety and reliability initiatives. The company anticipates capital expenditures to be approximately $3.7 billion for the full fiscal year 2025.
- In fiscal year 2024, capital expenditures were $2.9 billion, with about 83% of the investment focused on safety and reliability projects, including the replacement of over 850 miles of pipeline and more than 55,000 service lines.
- Looking ahead, the company plans approximately $26 billion in capital spending from fiscal year 2026 through 2030, with over 85% allocated to safety and reliability, and anticipates fiscal 2026 capital expenditures of about $4.2 billion.
Latest Trefis Analyses
Trade Ideas
Select ideas related to ATO.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 12122025 | CTRI | Centuri | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 16.6% | 16.6% | -5.5% |
| 11212025 | PEG | Public Service Enterprise | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 6.8% | 6.8% | -4.0% |
| 09262025 | PCG | PG&E | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 27.5% | 27.5% | -0.8% |
| 09052025 | AES | AES | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 36.9% | 36.9% | -3.2% |
| 09302022 | ATO | Atmos Energy | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 11.7% | 6.7% | -3.7% |
Research & Analysis
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Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 92.80 |
| Mkt Cap | 29.3 |
| Rev LTM | 8,000 |
| Op Inc LTM | 1,972 |
| FCF LTM | -2,006 |
| FCF 3Y Avg | -1,002 |
| CFO LTM | 2,424 |
| CFO 3Y Avg | 2,644 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 13.5% |
| Rev Chg 3Y Avg | 1.5% |
| Rev Chg Q | 12.5% |
| QoQ Delta Rev Chg LTM | 3.1% |
| Op Mgn LTM | 26.1% |
| Op Mgn 3Y Avg | 25.4% |
| QoQ Delta Op Mgn LTM | 0.0% |
| CFO/Rev LTM | 34.4% |
| CFO/Rev 3Y Avg | 35.2% |
| FCF/Rev LTM | -18.7% |
| FCF/Rev 3Y Avg | -14.4% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 29.3 |
| P/S | 3.6 |
| P/EBIT | 13.2 |
| P/E | 24.5 |
| P/CFO | 11.2 |
| Total Yield | 6.1% |
| Dividend Yield | 2.3% |
| FCF Yield 3Y Avg | -3.8% |
| D/E | 0.6 |
| Net D/E | 0.6 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 8.2% |
| 3M Rtn | 12.6% |
| 6M Rtn | 14.1% |
| 12M Rtn | 27.9% |
| 3Y Rtn | 73.2% |
| 1M Excs Rtn | 10.5% |
| 3M Excs Rtn | 13.3% |
| 6M Excs Rtn | 10.3% |
| 12M Excs Rtn | 12.3% |
| 3Y Excs Rtn | 6.7% |
Comparison Analyses
Price Behavior
| Market Price | $185.04 | |
| Market Cap ($ Bil) | 30.1 | |
| First Trading Date | 12/28/1983 | |
| Distance from 52W High | -1.1% | |
| 50 Days | 200 Days | |
| DMA Price | $172.43 | $165.05 |
| DMA Trend | up | up |
| Distance from DMA | 7.3% | 12.1% |
| 3M | 1YR | |
| Volatility | 13.9% | 16.1% |
| Downside Capture | -21.67 | 0.69 |
| Upside Capture | 29.08 | 25.27 |
| Correlation (SPY) | -3.1% | 17.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.34 | -0.07 | -0.05 | -0.09 | 0.15 | 0.22 |
| Up Beta | -0.38 | -0.46 | -0.32 | 0.08 | 0.14 | 0.17 |
| Down Beta | 0.20 | 0.24 | -0.05 | -0.26 | 0.19 | 0.25 |
| Up Capture | 36% | 34% | 22% | 12% | 17% | 10% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 17 | 28 | 40 | 78 | 154 | 430 |
| Down Capture | -154% | -66% | -19% | -30% | 3% | 31% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 3 | 12 | 20 | 45 | 96 | 321 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 27.8% | 16.1% | 1.33 | - |
| Sector ETF (XLU) | 23.3% | 15.7% | 1.14 | 71.2% |
| Equity (SPY) | 16.4% | 19.2% | 0.66 | 17.9% |
| Gold (GLD) | 77.1% | 26.1% | 2.17 | 13.7% |
| Commodities (DBC) | 19.6% | 17.1% | 0.89 | 3.9% |
| Real Estate (VNQ) | 3.1% | 16.6% | 0.01 | 53.7% |
| Bitcoin (BTCUSD) | -24.9% | 45.6% | -0.49 | 2.5% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 19.6% | 18.6% | 0.87 | - |
| Sector ETF (XLU) | 12.6% | 17.1% | 0.58 | 76.5% |
| Equity (SPY) | 13.0% | 17.0% | 0.60 | 33.5% |
| Gold (GLD) | 24.2% | 17.2% | 1.14 | 17.1% |
| Commodities (DBC) | 11.9% | 19.0% | 0.51 | 10.0% |
| Real Estate (VNQ) | 5.0% | 18.8% | 0.17 | 59.3% |
| Bitcoin (BTCUSD) | 6.5% | 56.8% | 0.34 | 10.9% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 12.8% | 21.2% | 0.55 | - |
| Sector ETF (XLU) | 10.7% | 19.1% | 0.49 | 82.0% |
| Equity (SPY) | 15.0% | 17.9% | 0.72 | 45.2% |
| Gold (GLD) | 15.1% | 15.6% | 0.80 | 13.8% |
| Commodities (DBC) | 9.0% | 17.6% | 0.43 | 12.2% |
| Real Estate (VNQ) | 6.1% | 20.7% | 0.26 | 63.3% |
| Bitcoin (BTCUSD) | 65.9% | 66.8% | 1.05 | 7.1% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/3/2026 | 1.8% | 3.2% | 10.4% |
| 11/5/2025 | 1.7% | 3.0% | -2.6% |
| 8/6/2025 | 3.6% | 6.3% | 6.6% |
| 5/7/2025 | -0.9% | -6.4% | -5.9% |
| 2/4/2025 | 1.9% | 1.9% | 3.4% |
| 11/6/2024 | 1.8% | 5.5% | 2.8% |
| 8/7/2024 | -0.9% | 0.4% | 2.7% |
| 5/8/2024 | -0.7% | -2.3% | -4.1% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 12 | 14 |
| # Negative | 10 | 12 | 10 |
| Median Positive | 1.8% | 3.1% | 3.7% |
| Median Negative | -0.9% | -2.3% | -3.6% |
| Max Positive | 8.4% | 8.9% | 14.8% |
| Max Negative | -2.9% | -6.4% | -5.9% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 02/03/2026 | 10-Q |
| 09/30/2025 | 11/14/2025 | 10-K |
| 06/30/2025 | 08/06/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/04/2025 | 10-Q |
| 09/30/2024 | 11/18/2024 | 10-K |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/06/2024 | 10-Q |
| 09/30/2023 | 11/14/2023 | 10-K |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/03/2023 | 10-Q |
| 12/31/2022 | 02/07/2023 | 10-Q |
| 09/30/2022 | 11/14/2022 | 10-K |
| 06/30/2022 | 08/03/2022 | 10-Q |
| 03/31/2022 | 05/04/2022 | 10-Q |
ATO Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The probability-adjusted skew is highly attractive at over 2.0x. The analysis indicates that while the stock is fairly valued, the market underappreciates the durability of its growth algorithm in a strong sector environment. The high visibility of the 'Alpha Driver' (rate base growth) is more powerful than the medium-probability 'Anti-Alpha' (regulatory risk), creating a compelling asymmetric risk/reward profile.
STOCK ARCHETYPE
Mature Cash CowAtmos Energy fits the 'Mature Cash Cow' archetype due to its status as a fully regulated utility with predictable, cost-plus-based revenue streams, high capital intensity, and a focus on generating consistent returns for shareholders through dividends and steady earnings growth.
INVESTMENT THESIS
The primary driver for shareholder return is the systematic expansion of Atmos Energy's regulated rate base, fueled by significant capital investment in its infrastructure within demographically advantaged territories, particularly Texas. This growth is highly visible and supported by a constructive regulatory framework.
- Planned investments of approximately $26 billion between fiscal years 2026-2030.
- Fiscal 2026 capital expenditure guidance is approximately $4.2 billion, with over 85% focused on safety and reliability.
- Population growth in key Texas service areas exceeds 1.5% annually, supplemented by industrial expansion from data centers.
- Long-term earnings per share growth target of 6% to 8% annually, driven by rate base growth.
PRIMARY RISK
The greatest friction to the investment thesis is the risk of less favorable outcomes in pending and future rate cases. A shift to a more stringent regulatory environment, particularly in Texas, could lead to lower-than-expected revenue increases and/or a reduction in the allowed Return on Equity (ROE), compressing the company's primary earnings driver.
- A $35.8 million Dallas Area Rate Review (DARR) mechanism case is currently pending with the Texas Railroad Commission.
- Historical precedent: A May 2025 West Texas rate case settlement resulted in receiving only $30.2 million of a $66.1 million request and a cut in the approved ROE to 9.8% from a requested 10.85%.
| KPI | Threshold | Rationale |
|---|---|---|
| Capital Expenditures | Meet or Exceed ~$4.2B in FY2026 | This is the primary leading indicator for rate base growth, which is the direct driver of future earnings. |
| Dallas Area Rate Review (DARR) Outcome | Approved Revenue >$25M & Approved ROE >9.75% | Serves as the most immediate barometer for the health of the Texas regulatory environment, which is critical to the long-term thesis. |
| Annual Customer Growth | Maintain >50,000 Net New Customers | Confirms the continuation of the secular population and business growth tailwind in core service territories. |
Regulatory Risk vs. Regulated Growth Certainty
BULL VIEW
Consistent 6-8% EPS growth is locked in by a $26B capex plan in supportive states, making regulatory headwinds manageable noise within a durable compounding story.
CORE TENSION
Can Atmos's predictable rate base growth, driven by aggressive capex, offset the risk of adverse regulatory decisions and rising external costs (interest rates, commodity prices)?
PREVAILING SENTIMENT
The pending $35.8 million Dallas Area Rate Review (DARR) case is the most immediate, tangible event that will tip the scales between the bull and bear case.
BEAR VIEW
A less favorable outcome in the pending Dallas rate case could signal a tougher regulatory environment, compressing returns on invested capital and breaking the growth algorithm.
| Timeline | Event & Metric To Watch |
|---|---|
Next 1-3 Months | Dallas Area Rate Review (DARR) Ruling Watch: Final approved revenue increase vs. the $35.8M requested and the approved Return on Equity (ROE) vs. the typical 9.75-9.8% range. |
Early May 2026 | Q2 2026 Earnings Call Watch: Updates to the full-year capital expenditure guidance. Any deviation from the ~$4.2B plan signals a change in the core growth algorithm. |
Anytime | Natural Gas Price Volatility Event Watch: Henry Hub front-month natural gas contract price. A sustained move above $4.75/MMBtu is the key threshold. |
Ongoing / H1 2026 | Federal Reserve Interest Rate Decision Watch: 10-Year U.S. Treasury Yield. A break and hold above 4.5% would trigger sector-wide de-rating. |
| Date | Event | Stock Impact |
|---|---|---|
2025-08-07 | Q3 2025 Earnings Report Details: Reported Q3 EPS of $1.16, in-line with estimates, and raised the lower end of its full-year 2025 guidance, signaling confidence in its operational execution. | Rose significantly by 3.63% $155.31 -> $160.95 |
2025-10-15 | Announced $600M Senior Notes Offering Details: Atmos priced $600 million of 5.45% senior notes due 2055 to fund its capital expenditure program, demonstrating continued access to capital markets. | Flat (0.87%) $176.63 -> $178.16 |
2025-11-06 | Q4 2025 Earnings & FY26 Guidance Details: Reported Q4 EPS of $1.04, beating estimates of $0.98. Initiated FY26 EPS guidance of $8.15-$8.35 and announced a 14.9% dividend increase. | Rose significantly by 1.67% $171.60 -> $174.47 |
2026-02-03 | Q1 2026 Earnings Release Details: Atmos reported Q1 EPS of $2.44, beating consensus estimates of $2.41. The company affirmed its fiscal 2026 guidance and highlighted a $1B capital expenditure for the quarter. | Modest 1.37% gain $166.52 -> $168.81 |
Position Sizing
4% - 6%
NORMAL
Volatility is stable and compressing. While Neutral sentiment and a premium valuation prevent an aggressive position, the high visibility and stable moat argue against a minimal one. This fits a standard allocation.
Diversification Alternatives
NFG
INDUSTRYOffers a more diversified model with E&P exposure, but this comes with higher commodity price risk and significant legal/environmental overhangs that ATO does not share.
WTRG
SECTORProvides exposure to the regulated utility space through water, which has similar characteristics but avoids direct natural gas commodity and regulatory risk.
Atmos Energy is a regulated utility executing a long-term, large-scale capital expenditure plan to modernize its natural gas infrastructure, which grows its regulated asset base and directly drives ~6-8% annual EPS and dividend growth.
Filter all news through the lens of capital expenditure execution and regulatory outcomes. The core thesis is that spending on safety and reliability directly translates to rate base growth, which regulators then allow a return on.
Favorable rate case outcomes in key states (especially Texas); announcements of accelerated or expanded capital expenditure plans (currently ~$4.2B for FY2026); constructive new legislation (like Texas HB 4384) that improves cost recovery timeliness. [9, 11]
Adverse regulatory decisions (rate case denials, ROE reductions); significant project delays or cost overruns on major pipeline projects; rising interest rates that increase financing costs and make utility dividends less attractive relative to bonds.
Short-term fluctuations in natural gas commodity prices (costs are largely passed through to customers); quarterly revenue missing/beating estimates (EPS and rate base growth are the key metrics); minor winter storm operational issues (unless they result in major unrecoverable costs like Winter Storm Uri).
Repricing Catalyst
The primary catalyst is the consistent execution of its multi-year, ~$26 billion capital investment plan through FY2030, focused on safety and modernization. [3] This spending systematically grows the company's 'rate base' (the asset value on which it's allowed to earn a regulated profit), leading to predictable, regulator-approved rate increases and supporting a 6-8% long-term EPS and dividend growth target. [2, 12, 13]
Gas Distribution to Homes & Businesses
$3878000.0B TTM (79% of Total) · 33% MarginWhat It Is
Regulated natural gas delivery services to residential, commercial, public-authority, and industrial customers across eight states.
Who Pays & How
Over 3.4 million customers pay a monthly, tariff-based rate for the delivery of natural gas. [9] They pay because Atmos owns and operates the essential, monopolistic physical pipeline infrastructure required to heat homes and power businesses in its service territories. Switching costs are effectively infinite due to the lack of alternative gas grids.
Competition
Gas Pipeline & Storage
$1007000.0B TTM (21% of Total) · 33% MarginWhat It Is
Natural gas transportation and storage services via ~5,700 miles of intrastate pipeline in Texas (Atmos Pipeline-Texas or APT) and five underground storage reservoirs. [10]
Who Pays & How
Local distribution companies (including Atmos's own distribution segment), industrial customers, and power plants pay tariff-based rates to transport and store natural gas. They pay for access to a critical infrastructure network that connects gas supply basins to major market hubs.
Competition
External Quote Links
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| FinViz |
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