Here's Why You Should Add Atmos Energy to Your Portfolio Right Now

Atmos Energy Corp. ATO benefits from rising natural gas demand and newly approved rates supporting revenue and earnings growth. The company undertakes systematic capital investments to upgrade and replace aging transmission and distribution systems, enhancing service reliability and supporting long-term growth.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.

ATO’s Growth Projection & Surprise History

The Zacks Consensus Estimate for ATO’s fiscal 2026 earnings has moved up 1.73% in the past 60 days to $8.22 per share. The Zacks Consensus Estimate for ATO’s fiscal 2026 sales is pinned at $5.58 billion, indicating year-over-year growth of 18.73%.

ATO’s long-term (three to five years) earnings growth rate is 7.01%.

ATO has missed earnings estimates in one of the last four reported quarters and has surpassed earnings in the other three quarters, resulting in an average positive earnings surprise 2.53%.

ATO’s Stable Investments

Atmos Energy has invested $1.03 billion during the first quarter of fiscal 2026, 89% of which was dedicated to upgrading infrastructure to provide safe and reliable service to customers. The company plans to invest $4.2 billion during fiscal 2026 and $26 billion in fiscal 2026-2030, with more than 85% focused on improving safety and system reliability.

ATO’s Dividend History

Atmos Energy has a dividend yield of 2.16% versus the Zacks S&P 500 composite’s average of 1.51%. The company announced its dividend at $1 per share, resulting in an annualized dividend of $4 per share, reflecting a 14.9% increase from fiscal 2025.

The company has been rewarding its shareholders with a continuous increase in dividends for 42 years. It targets nearly 6-8% dividend growth through 2030, subject to approval by the board of directors.

ATO’s Debt Position

ATO’s time earned ratio (TIE) at the end of the fiscal first quarter of 2026 was 11.2. The TIE ratio measures a company’s ability to meet long-term debt obligations, indicating how effectively operating earnings cover interest expenses and reflecting its overall financial stability and solvency.

ATO’s total debt-to-capital is 40.28%, which is lower than the industry’s 55.08%, indicating stronger financial stability and lower leverage risk.

Price Performance of ATO

In the past three months, Atmos Energy shares have rallied 10.3% compared with the industry’s 7.1% growth.

Image Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks from the same industry are Chesapeake Utilities CPK, Northwest Natural NWN and ONE Gas OGS, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Currently, CPK, NWN and OGS’ dividend yields are 2.17%, 3.67% and 3.16%, respectively.

The Zacks Consensus Estimate for Chesapeake Utilities, Northwest Natural and ONE Gas 2026 EPS is pegged at $6.51, $3.05 and $4.73, suggesting year-over-year growth of 8.32%,4.10% and 5.58%, respectively.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Chesapeake Utilities Corporation (CPK): Free Stock Analysis Report

Atmos Energy Corporation (ATO): Free Stock Analysis Report

Northwest Natural Gas Company (NWN): Free Stock Analysis Report

ONE Gas, Inc. (OGS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research