Atmos Energy Corporation (NYSE: ATO) and Questar (NYSE:STR) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.
Insider & Institutional Ownership
71.0% of Atmos Energy Corporation shares are held by institutional investors. Comparatively, 78.9% of Questar shares are held by institutional investors. 1.6% of Atmos Energy Corporation shares are held by company insiders. Comparatively, 0.4% of Questar shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares Atmos Energy Corporation and Questar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Atmos Energy Corporation||N/A||10.59%||3.80%|
Volatility and Risk
Atmos Energy Corporation has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Questar has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.
Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Questar pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Atmos Energy Corporation pays out 48.1% of its earnings in the form of a dividend. Questar pays out 79.3% 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 Corporation has raised its dividend for 37 consecutive years and Questar has raised its dividend for 34 consecutive years.
This is a breakdown of current ratings and price targets for Atmos Energy Corporation and Questar, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Atmos Energy Corporation||1||0||3||0||2.50|
Atmos Energy Corporation currently has a consensus price target of $86.25, suggesting a potential downside of 1.38%. Questar has a consensus price target of $25.00, suggesting a potential downside of 0.24%. Given Questar’s higher possible upside, analysts plainly believe Questar is more favorable than Atmos Energy Corporation.
Valuation and Earnings
This table compares Atmos Energy Corporation and Questar’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Atmos Energy Corporation||$3.62 billion||2.56||$1.04 billion||$3.74||23.39|
Atmos Energy Corporation has higher revenue and earnings than Questar. Questar is trading at a lower price-to-earnings ratio than Atmos Energy Corporation, indicating that it is currently the more affordable of the two stocks.
Atmos Energy Corporation beats Questar on 9 of the 14 factors compared between the two stocks.
Atmos Energy Corporation Company Profile
Atmos Energy Corporation is engaged primarily in the regulated natural gas distribution and pipeline businesses, as well as other nonregulated natural gas businesses. The Company operates through three segments: regulated distribution segment, which includes its regulated distribution and related sales operations; regulated pipeline segment, which includes the pipeline and storage operations of its Atmos Pipeline-Texas Division, and nonregulated segment, which includes its nonregulated natural gas management, nonregulated natural gas transmission, storage and other services. The Company’s nonregulated businesses provide natural gas management, marketing, transportation and storage services to municipalities, local gas distribution companies, including certain of its natural gas distribution divisions and industrial customers principally in the Midwest and Southeast.
Questar Company Profile
Dominion Questar Corp, formerly Questar Corporation, is an integrated natural gas holding company. The Company, through its subsidiaries is principally engaged in three lines of business, which include Questar Gas Company (Questar Gas), which provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro Company (Wexpro), which develops and produces natural gas from cost-of-service reserves for Questar Gas customers, and Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western the United States and provides other energy services. The Company is also engaged in Corporate and Other operations, which include Questar Fueling Company (Questar Fueling) that builds, owns and operates compressed natural gas (CNG) fueling stations for fleet operators with medium- and heavy-duty trucks and tractors. Questar Gas distributes gas to customers along the Wasatch Front, Provo, Salt Lake, Ogden and other areas in Utah.
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