Vectren Corporation (NYSE: VVC) and Atmos Energy Corporation (NYSE:ATO) are both mid-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Earnings and Valuation

This table compares Vectren Corporation and Atmos Energy Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vectren Corporation $2.59 billion 2.11 $668.60 million $2.70 24.38
Atmos Energy Corporation $3.62 billion 2.58 $1.04 billion $3.74 23.57

Atmos Energy Corporation has higher revenue and earnings than Vectren Corporation. Atmos Energy Corporation is trading at a lower price-to-earnings ratio than Vectren Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Vectren Corporation and Atmos Energy Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vectren Corporation 0 0 3 0 3.00
Atmos Energy Corporation 1 1 3 0 2.40

Vectren Corporation currently has a consensus price target of $66.00, suggesting a potential upside of 0.27%. Atmos Energy Corporation has a consensus price target of $85.40, suggesting a potential downside of 3.13%. Given Vectren Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Vectren Corporation is more favorable than Atmos Energy Corporation.

Risk & Volatility

Vectren Corporation has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Atmos Energy Corporation has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares Vectren Corporation and Atmos Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vectren Corporation 8.66% 12.65% 3.90%
Atmos Energy Corporation N/A 10.59% 3.80%

Insider & Institutional Ownership

63.8% of Vectren Corporation shares are owned by institutional investors. Comparatively, 71.0% of Atmos Energy Corporation shares are owned by institutional investors. 0.1% of Vectren Corporation shares are owned by insiders. Comparatively, 1.6% of Atmos Energy Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Vectren Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.6%. Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Vectren Corporation pays out 62.2% of its earnings in the form of a dividend. Atmos Energy Corporation pays out 48.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Vectren Corporation has raised its dividend for 57 consecutive years and Atmos Energy Corporation has raised its dividend for 34 consecutive years. Vectren Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Vectren Corporation beats Atmos Energy Corporation on 9 of the 16 factors compared between the two stocks.

About Vectren Corporation

Vectren Corporation (Vectren) is an energy holding company. The Company segregates its operations into groups, including the Utility Group, the Nonutility Group, and Corporate and Other. The Company’s subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings or VUHI), serves as the intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana Gas and Electric Company (SIGECO) and Vectren Energy Delivery of Ohio, Inc. (VEDO). The Company, through Vectren Enterprises Inc. (Enterprises), is involved in non-utility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects.

About Atmos Energy Corporation

Atmos Energy Corporation is a fully-regulated, natural-gas-only distributor engaged primarily in the regulated natural gas distribution and pipeline businesses, as well as other nonregulated natural gas businesses. It operates through three segments: regulated distribution segment, which includes its regulated distribution and related sales operations; regulated pipeline segment, which includes pipeline and storage operations of its Atmos Pipeline-Texas Division, and nonregulated segment, which includes its nonregulated natural gas management, nonregulated natural gas transmission, storage and other services. Its nonregulated businesses provide natural gas management, transportation and storage services to local gas distribution companies, including certain of its natural gas distribution divisions and industrial customers in the Midwest and Southeast. It also manages its natural gas pipeline and storage assets, including its intrastate natural gas pipeline systems in Texas.

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