Here's How Much a $1000 Investment in Atmos Energy Made 10 Years Ago Would Be Worth Today

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Atmos Energy (ATO) ten years ago? It may not have been easy to hold on to ATO for all that time, but if you did, how much would your investment be worth today?

Atmos Energy's Business In-Depth

With that in mind, let's take a look at Atmos Energy's main business drivers.

Founded in 1906, Atmos Energy Corporation, along with its subsidiaries, is engaged in regulated natural gas distribution and storage business. The company serves in excess of three million natural gas distribution customers in more than 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. The company operates more than 72,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines. Atmos Energy’s   pipelines are connected to 37 different pipelines across eight states, thereby providing supplier diversity.

Since 2011, Atmos Energy’s operating strategy has been focused on modernizing its transmission and distribution network as well as reducing regulatory lag. This operating strategy allowed the company to increase capital expenditure by nearly 13% per annum, improve safety and reliability of its operations as well as lower methane emissions from its system.

The company manages its operation through the following reportable segments.

Distribution segment is primarily comprised of the company’s regulated natural gas distribution and related sales operations in eight states, and storage assets located in Kentucky and Tennessee. At the end of fiscal 2021, this segment contributed nearly $3,238.8 million or 95%% to its total revenues.

Pipeline and storage segment is primarily comprised of the pipeline and storage operations of Atmos Pipeline-Texas division, and the company’s natural gas transmission operations in Louisiana. The company operates five storage facilities, having a combined storage capacity of 46 billion cubic feet. This segment contributed $168.7 million or 5% to total fiscal 2021 revenues.

Till Dec 31, 2016, the company had a non-regulated natural gas marketing business that was conducted by Atmos Energy Marketing (AEM). However, effective Jan 1, 2017, it sold all of the equity interests of AEM to a subsidiary of CenterPoint Energy Inc. As a result of the sale, Atmos Energy fully exited from the non-regulated natural gas marketing business. Accordingly, these operations have been reported as discontinued operations.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Atmos Energy ten years ago, you're likely feeling pretty good about your investment today.

A $1000 investment made in April 2012 would be worth $3,826.46, or a gain of 282.65%, as of April 20, 2022, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 224.07% and gold's return of 13.97% over the same time frame.

Looking ahead, analysts are expecting more upside for ATO.

Atmos Energy continues to benefit from the rising demand from the expanding customer base and investment plan in the range of $13-$14 billion for the fiscal 2022-2026 time period. This will help to increase the reliability of pipelines. Returns within a year of capital investment continue to boost ATO’s performance and allow it to increase its shareholder value through dividend hikes. It has enough liquidity to meet near-term debt obligations. Shares of ATO have outperformed the industry in the past three months. Despite making investments in infrastructure, risks of accident remain in distributing and transporting natural gas. Competition from clean alternate fuel supplier is a headwind. Dependence on a single state for bulk of its revenues exposes it to the vagaries of weather and economic conditions of that state.

Over the past four weeks, shares have rallied 5.65%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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