Atmos Energy Corp's Dividend Analysis
Assessing the Sustainability and Growth of Atmos Energy's Dividends
Atmos Energy Corp (NYSE:ATO) recently announced a dividend of $0.81 per share, payable on 2023-12-11, with the ex-dividend date set for 2023-11-24. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Atmos Energy Corp's dividend performance and assess its sustainability.
What Does Atmos Energy Corp Do?
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Atmos Energy is the largest publicly traded, fully regulated, pure-play natural gas utility in the United States, serving more than 3 million customers in Texas, Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, and Virginia. About two thirds of its earnings come from Texas, where it distributes natural gas in northern Texas and owns an intrastate gas pipeline spanning several key shale gas formations and interconnected with five storage facilities.
A Glimpse at Atmos Energy Corp's Dividend History
Atmos Energy Corp has maintained a consistent dividend payment record since 1983, distributing dividends on a quarterly basis. The company has increased its dividend each year since 1983, earning the prestigious title of a dividend aristocrat, a designation for companies with at least 40 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Atmos Energy Corp's Dividend Yield and Growth
As of today, Atmos Energy Corp currently has a 12-month trailing dividend yield of 2.65% and a 12-month forward dividend yield of 2.89%, indicating an expected increase in dividend payments over the next year. Over the past three years, Atmos Energy Corp's annual dividend growth rate was 8.80%, which increased to 8.90% over a five-year horizon, and the annual dividends per share growth rate over the past decade stands at 7.90%. The 5-year yield on cost for Atmos Energy Corp stock is approximately 4.06% as of today.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Atmos Energy Corp's dividend payout ratio is currently 0.49 as of 2023-09-30, indicating a balanced approach to dividend payments and retained earnings for growth and stability. Furthermore, Atmos Energy Corp's profitability rank of 7 out of 10, as of 2023-09-30, suggests good profitability prospects. The company has reported positive net income each year over the past decade, reinforcing its strong financial position.
Growth Metrics: The Future Outlook
Atmos Energy Corp's growth rank of 7 out of 10 suggests a solid growth trajectory. The company's revenue per share and 3-year revenue growth rate of approximately 8.70% per year outperform roughly 53.39% of global competitors. Additionally, Atmos Energy Corp's 3-year EPS growth rate of 6.50% per year and 5-year EBITDA growth rate of 7.70% outperform approximately 55.66% and 60.22% of global competitors, respectively, highlighting its capability to sustain dividends in the long run.
Next Steps
Considering Atmos Energy Corp's consistent dividend payments, robust dividend growth rate, prudent payout ratio, and solid profitability and growth metrics, the company presents a compelling case for value investors seeking stable income streams. These factors not only reflect the company's financial health but also its commitment to returning value to shareholders. As Atmos Energy navigates the dynamic energy sector, its strategic positioning and operational excellence could continue to support its dividend aristocrat status. Will Atmos Energy Corp maintain its streak of dividend growth, and what could this mean for long-term investors? For those interested in high-dividend yield opportunities, GuruFocus Premium users can explore using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
