Analyzing Atmos Energy (NYSE:ATO) and Naturgy Energy Group (OTCMKTS:GASNF)

Atmos Energy (NYSE:ATO) and Naturgy Energy Group (OTCMKTS:GASNF) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings and Valuation

This table compares Atmos Energy and Naturgy Energy Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atmos Energy	$4.70 billion	6.12	$1.20 billion	$8.41	20.25
Naturgy Energy Group	N/A	N/A	N/A	$1.56	21.70

Atmos Energy has higher revenue and earnings than Naturgy Energy Group. Atmos Energy is trading at a lower price-to-earnings ratio than Naturgy Energy Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Atmos Energy and Naturgy Energy Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atmos Energy	0	9	4	0	2.31
Naturgy Energy Group	0	0	0	0	0.00

Atmos Energy presently has a consensus price target of $189.09, indicating a potential upside of 11.03%. Given Atmos Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Atmos Energy is more favorable than Naturgy Energy Group.

Profitability

This table compares Atmos Energy and Naturgy Energy Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atmos Energy	28.50%	9.67%	4.67%
Naturgy Energy Group	N/A	N/A	N/A

Dividends

Atmos Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. Naturgy Energy Group pays an annual dividend of $0.71 per share and has a dividend yield of 2.1%. Atmos Energy pays out 47.6% of its earnings in the form of a dividend. Naturgy Energy Group pays out 45.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Atmos Energy has increased its dividend for 41 consecutive years. Atmos Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

90.2% of Atmos Energy shares are held by institutional investors. Comparatively, 9.2% of Naturgy Energy Group shares are held by institutional investors. 0.4% of Atmos Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Atmos Energy beats Naturgy Energy Group on 12 of the 14 factors compared between the two stocks.

About Atmos Energy

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 two segments, Distribution, and Pipeline and Storage. 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 3.3 million residential, commercial, public authority, and industrial customers; and owned 73,689 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 facilities in Texas; provides ancillary services customary to the pipeline industry, including parking arrangements, lending, and inventory sales; and owned 5,645 miles of gas transmission lines. Atmos Energy Corporation was founded in 1906 and is headquartered in Dallas, Texas.

About Naturgy Energy Group

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas. It operates through Distribution Networks and Energy Markets segments. The company engages in the regulated gas and electricity distribution; sale of liquefied natural gas and the maritime transport business; management conventional thermal generation facilities; and generation and sale of electricity through wind, mini-hydro, solar, and cogeneration sources, as well as provision of supply management services. It serves in Spain, Australia, the United States, Argentina, Brazil, Chile, Mexico, Panama, the rest of Latin America, and internationally. The company was formerly known as Gas Natural SDG, S.A. and changed its name to Naturgy Energy Group, S.A. in June 2018. Naturgy Energy Group, S.A. was incorporated in 1843 and is based in Madrid, Spain.