DB:AEO

Stock Analysis Report

Executive Summary

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States.

Rewards

Earnings are forecast to grow 10.55% per year

Pays a high and reliable dividend of 2.04%

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Atmos Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AEO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.0%

AEO

1.1%

DE Gas Utilities

0.5%

DE Market


1 Year Return

26.7%

AEO

4.6%

DE Gas Utilities

15.5%

DE Market

Return vs Industry: AEO exceeded the German Gas Utilities industry which returned 3.6% over the past year.

Return vs Market: AEO exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

AEOIndustryMarket
7 Day3.0%1.1%0.5%
30 Day3.0%1.6%1.4%
90 Day3.0%2.3%5.3%
1 Year29.3%26.7%9.5%4.6%19.2%15.5%
3 Year59.5%49.4%50.4%30.1%15.7%5.5%
5 Year131.6%105.8%50.4%12.5%27.3%10.1%

Price Volatility Vs. Market

How volatile is Atmos Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Atmos Energy undervalued compared to its fair value and its price relative to the market?

26.59x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AEO (€100) is trading above our estimate of fair value (€48.83)

Significantly Below Fair Value: AEO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AEO is poor value based on its PE Ratio (25.8x) compared to the Gas Utilities industry average (19.9x).

PE vs Market: AEO is poor value based on its PE Ratio (25.8x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: AEO is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: AEO is overvalued based on its PB Ratio (2.3x) compared to the XE Gas Utilities industry average (1.3x).


Next Steps

Future Growth

How is Atmos Energy forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AEO's forecast earnings growth (10.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: AEO's earnings (10.6% per year) are forecast to grow slower than the German market (13.2% per year).

High Growth Earnings: AEO's earnings are forecast to grow, but not significantly.

Revenue vs Market: AEO's revenue (10.7% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: AEO's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AEO's Return on Equity is forecast to be low in 3 years time (9%).


Next Steps

Past Performance

How has Atmos Energy performed over the past 5 years?

14.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AEO has high quality earnings.

Growing Profit Margin: AEO's current net profit margins (17.6%) are lower than last year (19.3%).


Past Earnings Growth Analysis

Earnings Trend: AEO's earnings have grown by 14.4% per year over the past 5 years.

Accelerating Growth: AEO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AEO had negative earnings growth (-15.2%) over the past year, making it difficult to compare to the Gas Utilities industry average (10.6%).


Return on Equity

High ROE: AEO's Return on Equity (8.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Atmos Energy's financial position?


Financial Position Analysis

Short Term Liabilities: AEO's short term assets ($458.0M) do not cover its short term liabilities ($1.2B).

Long Term Liabilities: AEO's short term assets ($458.0M) do not cover its long term liabilities ($6.4B).


Debt to Equity History and Analysis

Debt Level: AEO's debt to equity ratio (69.5%) is considered high.

Reducing Debt: AEO's debt to equity ratio has reduced from 86.7% to 69.5% over the past 5 years.

Debt Coverage: AEO's debt is well covered by operating cash flow (24.3%).

Interest Coverage: AEO's interest payments on its debt are well covered by EBIT (7.6x coverage).


Balance Sheet

Inventory Level: AEO has a high level of physical assets or inventory.

Debt Coverage by Assets: AEO's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Atmos Energy's current dividend yield, its reliability and sustainability?

1.98%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.5%industryaverage5.1%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: AEO's dividend (2.04%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: AEO's dividend (2.04%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: AEO's dividends per share have been stable in the past 10 years.

Growing Dividend: AEO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.2%), AEO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AEO's dividends in 3 years are forecast to be well covered by earnings (49.8% payout ratio).


Next Steps

Management

What is the CEO of Atmos Energy's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Kevin Akers (56yo)

0.3yrs

Tenure

US$7,855,539

Compensation

Mr. John Kevin Akers, also known as Kevin, has been President, Chief Executive Officer and Director of Atmos Energy Corporation since October 1, 2019. Mr. Akers served as Executive Vice President of Safety ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD7.86M) is above average for companies of similar size in the German market ($USD4.52M).

Compensation vs Earnings: Kevin's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

2.7yrs

Average Tenure

51yo

Average Age

Experienced Management: AEO's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

10.7yrs

Average Tenure

70yo

Average Age

Experienced Board: AEO's board of directors are seasoned and experienced ( 10.7 years average tenure).


Insider Trading

Insider Buying: AEO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sell€359,38612 Nov 19
David Park
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Utility Operations
Shares3,710
Max Price€96.87

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.6%.


Management Team

  • Kim Cocklin (68yo)

    Executive Chairman of the Board

    • Tenure: 2.3yrs
    • Compensation: US$5.88m
  • Kevin Akers (56yo)

    CEO, President & Director

    • Tenure: 0.3yrs
    • Compensation: US$7.86m
  • Rich Gius (62yo)

    VP & Chief Information Officer

    • Tenure: 12.3yrs
  • Jennifer Hills (53yo)

    Vice President of Investor Relations

    • Chris Forsythe (47yo)

      Senior VP & CFO

      • Tenure: 2.9yrs
      • Compensation: US$2.16m
    • David Park (48yo)

      Senior Vice President of Utility Operations

      • Tenure: 3yrs
      • Compensation: US$1.85m
    • Matt Robbins (49yo)

      Senior Vice President of Human Resources

      • Tenure: 3yrs
    • Karen Hartsfield (49yo)

      Senior VP

      • Tenure: 2.4yrs
    • Liz Beauchamp

      Vice President of Governmental & Public Affairs

      • Tenure: 2.4yrs
    • Jeff Knights

      Senior Vice President of Technical & Operating Services

      • Tenure: 1.4yrs

    Board Members

    • Bob Best (73yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$250.00k
    • Richard Ware (73yo)

      Independent Director

      • Tenure: 26yrs
      • Compensation: US$250.00k
    • Nancy Quinn (66yo)

      Independent Director

      • Tenure: 15.4yrs
      • Compensation: US$262.51k
    • Richard Gordon (70yo)

      Lead Director

      • Tenure: 3.9yrs
      • Compensation: US$279.01k
    • Kim Cocklin (68yo)

      Executive Chairman of the Board

      • Tenure: 2.3yrs
      • Compensation: US$5.88m
    • Kevin Akers (56yo)

      CEO, President & Director

      • Tenure: 0.3yrs
      • Compensation: US$7.86m
    • Steve Springer (73yo)

      Director

      • Tenure: 14.3yrs
      • Compensation: US$250.00k
    • Denise Bunkley

      Member of the Customer Advisory Board

      • Bob Grable (73yo)

        Independent Director

        • Tenure: 10.7yrs
        • Compensation: US$260.00k
      • Dick Sampson (69yo)

        Independent Director

        • Tenure: 7.7yrs
        • Compensation: US$265.00k

      Company Information

      Atmos Energy Corporation's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Atmos Energy Corporation
      • Ticker: AEO
      • Exchange: DB
      • Founded: 1906
      • Industry: Gas Utilities
      • Sector: Utilities
      • Market Cap: US$14.172b
      • Listing Market Cap: US$12.772b
      • Shares outstanding: 122.26m
      • Website: https://www.atmosenergy.com

      Number of Employees


      Location

      • Atmos Energy Corporation
      • Three Lincoln Centre
      • Suite 1800
      • Dallas
      • Texas
      • 75240
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ATONYSE (New York Stock Exchange)YesCommon SharesUSUSDNov 1983
      AEODB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1983

      Biography

      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 Distribution, and Pipeline and Storage segments. 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 three million residential, commercial, public authority, and industrial customers. As of September 30, 2019, it owned 70,875 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 reservoirs in Texas; and provides ancillary services to the pipeline industry, including parking arrangements, lending, and inventory sales. It owns 5,669 miles of gas transmission lines. The company was founded in 1906 and is headquartered in Dallas, Texas. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/22 20:32
      End of Day Share Price2020/01/22 00:00
      Earnings2019/09/30
      Annual Earnings2019/09/30


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.