Critical Contrast: Atmos Energy (NYSE:ATO) versus Naturgy Energy Group (OTCMKTS:GASNY)

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

Insider and Institutional Ownership

0.0% of Naturgy Energy Group shares are owned by institutional investors. Comparatively, 90.2% of Atmos Energy shares are owned by institutional investors. 0.5% 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Naturgy Energy Group	1	0	0	0	1.00
Atmos Energy	0	2	4	0	2.67

Atmos Energy has a consensus price target of $133.17, indicating a potential upside of 2.92%. Given Atmos Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Atmos Energy is more favorable than Naturgy Energy Group.

Dividends

Naturgy Energy Group pays an annual dividend of $0.31 per share and has a dividend yield of 6.1%. Atmos Energy pays an annual dividend of $3.22 per share and has a dividend yield of 2.5%. Naturgy Energy Group pays out 99.2% 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 pays out 48.3% of its earnings in the form of a dividend. Atmos Energy has raised its dividend for 40 consecutive years.

Earnings & Valuation

This table compares Naturgy Energy Group and Atmos Energy’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Naturgy Energy Group	N/A	N/A	N/A	$0.31	16.14
Atmos Energy	$4.09 billion	4.77	$885.86 million	$6.67	19.40

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Naturgy Energy Group	N/A	N/A	N/A
Atmos Energy	24.65%	9.01%	4.35%

Summary

Atmos Energy beats Naturgy Energy Group on 13 of the 14 factors compared between the two stocks.

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.

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.