Yahoo Finance Atmos Energy Corp's Dividend Analysis
An In-depth Look at the Upcoming Dividend and Historical Performance
Atmos Energy Corp (NYSE:ATO) recently announced a dividend of $0.81 per share, payable on June 10, 2024, with the ex-dividend date set for May 24, 2024. As investors anticipate this forthcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, this analysis delves into the dividend performance of Atmos Energy Corp and evaluates its sustainability.
What Does Atmos Energy Corp Do?
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Atmos Energy is the largest publicly traded, fully regulated, pure-play natural gas utility in the United States, serving over 3 million customers across eight states including Texas, Colorado, and Louisiana. A significant portion of its earnings is derived from Texas, where it not only distributes natural gas in northern regions but also operates an extensive intrastate gas pipeline network linked with multiple storage facilities.
A Glimpse at Atmos Energy Corp's Dividend History
Since 1983, Atmos Energy Corp has maintained a reliable dividend payment record, distributing dividends quarterly. The company has consistently increased its dividend annually since 1983, earning it the prestigious title of a dividend aristocrata recognition awarded to firms that have raised their dividends annually for at least 41 years. Below is a chart depicting the annual Dividends Per Share to track historical trends.
Breaking Down Atmos Energy Corp's Dividend Yield and Growth
Currently, Atmos Energy Corp boasts a trailing dividend yield of 2.65% and a forward dividend yield of 2.75%, indicating anticipated increases in dividend payments over the next year. Over the last three years, the company's annual dividend growth rate was 8.80%, which slightly rose to 8.90% over a five-year period. Over the past decade, the annual growth rate of dividends per share has been 7.90%. Today, the 5-year yield on cost for Atmos Energy Corp stock is approximately 4.06%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, it is crucial to evaluate the company's payout ratio. As of March 31, 2024, Atmos Energy Corp's dividend payout ratio stands at 0.46, indicating a healthy balance between distributing earnings as dividends and retaining funds for future growth and stability. The company's profitability rank, at 7 out of 10, coupled with a decade of positive net income, underscores its robust profitability prospects.
Growth Metrics: The Future Outlook
Atmos Energy Corp's growth rank of 7 out of 10 suggests a favorable growth trajectory compared to its peers. Its revenue per share and 3-year revenue growth rate of 8.70% per year, although underperforming approximately 50.3% of global competitors, still indicates a strong revenue model. The company's 3-year EPS growth rate of 6.50% per year and a 5-year EBITDA growth rate of 7.70% further support its capability to sustain dividends in the long term.
Conclusion: Evaluating Atmos Energy Corp's Dividend Prospects
Considering Atmos Energy Corp's consistent dividend increases, a reasonable payout ratio, and solid profitability, the company presents a compelling case for dividend investors. While its growth metrics show some areas of underperformance relative to global peers, its overall financial health remains strong. Investors looking for stable dividend income might find Atmos Energy an attractive option, especially given its status as a dividend aristocrat. For those seeking to explore further, GuruFocus Premium provides tools like the High Dividend Yield Screener to discover high-yielding stock opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
