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

Volatility and Risk

Spire has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, Atmos Energy Corporation has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Spire and Atmos Energy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spire 1 3 1 0 2.00
Atmos Energy Corporation 1 1 3 0 2.40

Spire presently has a consensus price target of $70.80, indicating a potential downside of 7.69%. Atmos Energy Corporation has a consensus price target of $85.40, indicating a potential downside of 1.53%. Given Atmos Energy Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Atmos Energy Corporation is more favorable than Spire.

Earnings and Valuation

This table compares Spire and Atmos Energy Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Spire $1.76 billion 2.10 $462.00 million $3.49 21.98
Atmos Energy Corporation $3.62 billion 2.54 $1.04 billion $3.74 23.19

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

Profitability

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

Net Margins Return on Equity Return on Assets
Spire 9.12% 8.77% 2.63%
Atmos Energy Corporation N/A 10.59% 3.80%

Dividends

Spire pays an annual dividend of $2.10 per share and has a dividend yield of 2.7%. Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Spire pays out 60.2% 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. Spire has raised its dividend for 34 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

79.1% of Spire shares are held by institutional investors. Comparatively, 71.1% of Atmos Energy Corporation shares are held by institutional investors. 3.1% of Spire shares are held by company insiders. Comparatively, 1.6% of Atmos Energy Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Atmos Energy Corporation beats Spire on 12 of the 17 factors compared between the two stocks.

About Spire

Spire Inc., formerly The Laclede Group, Inc., is engaged to transform its business and pursue growth by growing its gas utility business through prudent investment in infrastructure upgrades and organic growth initiatives; acquire and integrate gas utilities; modernize its gas assets, and invest in innovation. The Company has two business segments, which include gas utility and gas marketing. The gas utility segment includes the regulated operations of Laclede Gas Company (Laclede Gas), Alabama Gas Corporation (Alagasco) and EnergySouth, Inc. (EnergySouth). The gas marketing segment includes Laclede Energy Resources, Inc. (LER), a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. Laclede Gas is engaged in the purchase, retail distribution and sale of natural gas, serving residential, commercial and industrial customers, through Missouri Gas Energy (MGE), Kansas City and western Missouri.

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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