Atmos Energy (NYSE:ATO) vs. AltaGas (OTCMKTS:ATGFF) Financial Analysis

AltaGas (OTCMKTS:ATGFF) and Atmos Energy (NYSE:ATO) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AltaGas	N/A	N/A	N/A
Atmos Energy	28.50%	9.67%	4.67%

Institutional and Insider Ownership

28.7% of AltaGas shares are owned by institutional investors. Comparatively, 90.2% of Atmos Energy shares are owned by institutional investors. 0.4% of Atmos Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 4.0%. Atmos Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.4%. AltaGas pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Atmos Energy pays out 47.6% of its earnings in the form of a dividend. Atmos Energy has raised its dividend for 41 consecutive years.

Valuation & Earnings

This table compares AltaGas and Atmos Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AltaGas	N/A	N/A	N/A	$1.10	34.40
Atmos Energy	$4.70 billion	6.01	$1.20 billion	$8.41	19.88

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AltaGas	0	0	6	0	3.00
Atmos Energy	0	9	4	0	2.31

Atmos Energy has a consensus target price of $187.73, suggesting a potential upside of 12.30%. Given Atmos Energy’s higher probable upside, analysts clearly believe Atmos Energy is more favorable than AltaGas.

Summary

Atmos Energy beats AltaGas on 10 of the 14 factors compared between the two stocks.

About AltaGas

AltaGas Ltd. operates as an energy infrastructure company in North America. The company operates through Utilities and Midstream segments. The Utilities segment owns and operates franchised, cost-of-service, rate-regulated natural gas distribution and storage utilities in Maryland, Virginia, Delaware, Pennsylvania, Ohio, and the District of Columbia serving approximately 1.6 million customers. This segment also provides interstate natural gas transportation and storage services. The Midstream segment engages in the natural gas gathering, processing, and extraction with 1.2 billion cubic feet per day (Bcf/d) of extraction processing capacity and approximately 1.2 Bcf/d of raw field gas processing capacity; fractionation and liquids handling business; and natural gas and natural gas liquids marketing activities. It also engages in LPG exports and distribution, logistics, trucking and rail terminals, and liquid storage businesses. In addition, the company operates gas-fired power generation and distribution assets with a generating capacity of 508 megawatt of power in California. It serves residential, commercial, and industrial customers. AltaGas Ltd. was founded in 1994 and is headquartered in Calgary, Canada.

About Atmos Energy

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States. It operates through two segments, Distribution, and Pipeline and Storage. The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately 3.3 million residential, commercial, public authority, and industrial customers; and owned 73,689 miles of underground distribution and transmission mains. The Pipeline and Storage segment engages in the pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage facilities in Texas; provides ancillary services customary to the pipeline industry, including parking arrangements, lending, and inventory sales; and owned 5,645 miles of gas transmission lines. Atmos Energy Corporation was founded in 1906 and is headquartered in Dallas, Texas.