Atmos Energy (NYSE:ATO) versus Spire (NYSE:SR) Head to Head Review

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atmos Energy	$4.70 billion	6.20	$1.20 billion	$8.40	20.54
Spire	$2.48 billion	2.10	$271.70 million	$8.97	9.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Atmos Energy	28.50%	9.67%	4.67%
Spire	21.48%	8.65%	2.21%

Dividends

Atmos Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. Spire pays an annual dividend of $3.30 per share and has a dividend yield of 3.8%. Atmos Energy pays out 47.6% of its earnings in the form of a dividend. Spire pays out 36.8% 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. Atmos Energy has raised its dividend for 41 consecutive years and Spire has raised its dividend for 22 consecutive years. Spire is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

90.2% of Atmos Energy shares are held by institutional investors. Comparatively, 87.4% of Spire shares are held by institutional investors. 0.4% of Atmos Energy shares are held by company insiders. Comparatively, 2.3% of Spire shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Atmos Energy has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Atmos Energy and Spire, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atmos Energy	0	10	3	0	2.23
Spire	0	5	7	1	2.69

Atmos Energy currently has a consensus price target of $183.27, suggesting a potential upside of 6.23%. Spire has a consensus price target of $92.91, suggesting a potential upside of 5.70%. Given Atmos Energy’s higher probable upside, equities analysts plainly believe Atmos Energy is more favorable than Spire.

Summary

Atmos Energy beats Spire on 11 of the 18 factors compared between the two stocks.

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.

About Spire

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.