Understanding the Dividend Dynamics of Atmos Energy Corp
Atmos Energy Corp (ATO, Financial) recently announced a dividend of $0.81 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-02-23. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Atmos Energy Corp's dividend performance and assess its sustainability.
What Does Atmos Energy Corp Do?
Atmos Energy is the largest publicly traded, fully regulated, pure-play natural gas utility in the United States, serving more than 3 million customers in Texas, Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, and Virginia. About two-thirds of its earnings come from Texas, where it distributes natural gas in northern Texas and owns an intrastate gas pipeline spanning several key shale gas formations and interconnected with five storage facilities.
A Glimpse at Atmos Energy Corp's Dividend History
Atmos Energy Corp has maintained a consistent dividend payment record since 1983. Dividends are currently distributed on a quarterly basis. Atmos Energy Corp has increased its dividend each year since 1983. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 41 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Atmos Energy Corp's Dividend Yield and Growth
As of today, Atmos Energy Corp currently has a 12-month trailing dividend yield of 2.65% and a 12-month forward dividend yield of 2.81%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Atmos Energy Corp's annual dividend growth rate was 8.80%. Extended to a five-year horizon, this rate increased to 8.90% per year. And over the past decade, Atmos Energy Corp's annual dividends per share growth rate stands at 7.90%.
Based on Atmos Energy Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Atmos Energy Corp stock as of today is approximately 4.06%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Atmos Energy Corp's dividend payout ratio is 0.48.
Atmos Energy Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Atmos Energy Corp's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of the year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Atmos Energy Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Atmos Energy Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Atmos Energy Corp's revenue has increased by approximately 8.70% per year on average, a rate that outperforms approximately 52.27% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Atmos Energy Corp's earnings increased by approximately 6.50% per year on average, a rate that outperforms approximately 53.92% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.70%, which outperforms approximately 60.23% of global competitors, indicates a healthy operational efficiency and profitability potential.
Next Steps for Investors
In conclusion, Atmos Energy Corp not only boasts a strong dividend history but also demonstrates a promising future through its growth and profitability metrics. With a prudent payout ratio and consistent earnings, the company's dividend payments appear to be sustainable. Investors considering Atmos Energy Corp for its dividend should also take note of its dividend growth rate, payout ratio, profitability, and growth metrics to make an informed decision. Value investors seeking high-dividend yield stocks can further explore opportunities using the High Dividend Yield Screener available to GuruFocus Premium users.
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.
