Atmos Energy (NYSE:ATO) and PT Perusahaan Gas Negara Tbk (OTCMKTS:PPAAF) Critical Analysis

Atmos Energy (NYSE:ATO) and PT Perusahaan Gas Negara Tbk (OTCMKTS:PPAAF) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares Atmos Energy and PT Perusahaan Gas Negara Tbk’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atmos Energy	24.65%	9.01%	4.35%
PT Perusahaan Gas Negara Tbk	N/A	N/A	N/A

Institutional & Insider Ownership

90.2% of Atmos Energy shares are held by institutional investors. Comparatively, 21.0% of PT Perusahaan Gas Negara Tbk shares are held by institutional investors. 0.5% of Atmos Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Atmos Energy and PT Perusahaan Gas Negara Tbk, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atmos Energy	0	2	4	0	2.67
PT Perusahaan Gas Negara Tbk	0	0	0	0	N/A

Atmos Energy presently has a consensus target price of $130.83, indicating a potential upside of 1.58%. Given Atmos Energy’s higher probable upside, analysts clearly believe Atmos Energy is more favorable than PT Perusahaan Gas Negara Tbk.

Dividends

Atmos Energy pays an annual dividend of $3.22 per share and has a dividend yield of 2.5%. PT Perusahaan Gas Negara Tbk pays an annual dividend of $0.01 per share and has a dividend yield of 16.6%. Atmos Energy pays out 48.3% of its earnings in the form of a dividend. PT Perusahaan Gas Negara Tbk pays out 38.7% 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 raised its dividend for 40 consecutive years. PT Perusahaan Gas Negara Tbk is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Atmos Energy and PT Perusahaan Gas Negara Tbk’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atmos Energy	$4.09 billion	4.75	$885.86 million	$6.67	19.31
PT Perusahaan Gas Negara Tbk	N/A	N/A	N/A	$0.04	2.33

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

Summary

Atmos Energy beats PT Perusahaan Gas Negara Tbk on 11 of the 13 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 PT Perusahaan Gas Negara Tbk

PT Perusahaan Gas Negara Tbk, together with its subsidiaries, engages in the transmission and distribution of natural gas in Indonesia. It operates through three segments: Gas Trading and Transmission, Exploration and Production of Oil and Gas, and Other Operations. The company is involved in the exploration, exploitation, and business development in oil and gas; and trading and transmission of gas, and processing of liquefied natural gas to industrial, commercial and household customers. It also provides fiber optic rental for network services; construction and maintenance services to the customers; management and leasing services of buildings and equipment; engineering and consultancy services; telecommunications; and electricity services. The company was founded in 1859 and is headquartered in Jakarta, Indonesia. PT Perusahaan Gas Negara Tbk operates as a subsidiary of PT Pertamina (Persero).