U.S. Markets open in 4 hrs 48 mins
  • S&P Futures

    4,059.50
    -86.75 (-2.09%)
     
  • Dow Futures

    33,521.00
    -662.00 (-1.94%)
     
  • Nasdaq Futures

    13,000.50
    -345.50 (-2.59%)
     
  • Russell 2000 Futures

    2,134.20
    -69.10 (-3.14%)
     
  • Crude Oil

    63.78
    -2.30 (-3.48%)
     
  • Gold

    1,819.90
    -16.20 (-0.88%)
     
  • Silver

    27.10
    -0.56 (-2.03%)
     
  • EUR/USD

    1.2080
    -0.0072 (-0.5919%)
     
  • 10-Yr Bond

    1.6950
    +0.0710 (+4.37%)
     
  • Vix

    28.25
    +6.41 (+29.35%)
     
  • GBP/USD

    1.4057
    -0.0087 (-0.6171%)
     
  • USD/JPY

    109.6200
    +1.0000 (+0.9206%)
     
  • BTC-USD

    50,306.74
    -204.15 (-0.40%)
     
  • CMC Crypto 200

    1,468.19
    -95.64 (-6.12%)
     
  • FTSE 100

    7,004.63
    +56.64 (+0.82%)
     
  • Nikkei 225

    28,147.51
    -461.08 (-1.61%)
     

Atmos Energy (NYSE:ATO) Shareholders Have Enjoyed A 25% Share Price Gain

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. Unfortunately for shareholders, while the Atmos Energy Corporation (NYSE:ATO) share price is up 25% in the last five years, that's less than the market return. The last year has been disappointing, with the stock price down 15% in that time.

Check out our latest analysis for Atmos Energy

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over half a decade, Atmos Energy managed to grow its earnings per share at 11% a year. The EPS growth is more impressive than the yearly share price gain of 4% over the same period. So it seems the market isn't so enthusiastic about the stock these days.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Atmos Energy's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Atmos Energy the TSR over the last 5 years was 39%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Atmos Energy shareholders are down 13% for the year (even including dividends), but the market itself is up 46%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Atmos Energy you should be aware of, and 1 of them is a bit concerning.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.