Comparing Atmos Energy (NYSE:ATO) and Spire (NYSE:SR)

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

Volatility & Risk

Spire has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Atmos Energy has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Dividends

Spire pays an annual dividend of $3.30 per share and has a dividend yield of 3.8%. Atmos Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. Spire pays out 36.8% of its earnings in the form of a dividend. Atmos Energy pays out 47.6% 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. Spire has increased its dividend for 22 consecutive years and Atmos Energy has increased its dividend for 41 consecutive years. Spire is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Spire and Atmos Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spire	0	5	7	1	2.69
Atmos Energy	0	10	3	0	2.23

Spire presently has a consensus price target of $92.91, indicating a potential upside of 5.70%. Atmos Energy has a consensus price target of $183.27, indicating a potential upside of 6.23%. Given Atmos Energy’s higher possible upside, analysts clearly believe Atmos Energy is more favorable than Spire.

Insider & Institutional Ownership

87.4% of Spire shares are owned by institutional investors. Comparatively, 90.2% of Atmos Energy shares are owned by institutional investors. 2.3% of Spire shares are owned by insiders. Comparatively, 0.4% of Atmos Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spire	21.48%	8.65%	2.21%
Atmos Energy	28.50%	9.67%	4.67%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spire	$2.48 billion	2.10	$271.70 million	$8.97	9.80
Atmos Energy	$4.70 billion	6.20	$1.20 billion	$8.40	20.54

Atmos Energy has higher revenue and earnings than Spire. Spire 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 Spire on 11 of the 18 factors compared between the two stocks.

About Spire

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.

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.