Atmos Energy (NYSE:ATO) vs. UGI (NYSE:UGI) Financial Comparison

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

Dividends

Atmos Energy pays an annual dividend of $3.48 per share and has a dividend yield of 2.2%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.1%. Atmos Energy pays out 48.3% of its earnings in the form of a dividend. UGI pays out 61.7% 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 increased its dividend for 41 consecutive years and UGI has increased its dividend for 37 consecutive years.

Insider and Institutional Ownership

90.2% of Atmos Energy shares are held by institutional investors. Comparatively, 82.3% of UGI shares are held by institutional investors. 0.5% of Atmos Energy shares are held by insiders. Comparatively, 0.7% of UGI shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Atmos Energy	25.35%	9.05%	4.39%
UGI	7.28%	16.21%	4.93%

Analyst Recommendations

This is a summary of current ratings and target prices for Atmos Energy and UGI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atmos Energy	0	5	4	2	2.73
UGI	0	1	2	0	2.67

Atmos Energy currently has a consensus target price of $156.95, suggesting a potential upside of 0.24%. UGI has a consensus target price of $31.33, suggesting a potential downside of 13.78%. Given Atmos Energy’s stronger consensus rating and higher possible upside, equities analysts plainly believe Atmos Energy is more favorable than UGI.

Volatility and Risk

Atmos Energy has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, UGI has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atmos Energy	$4.17 billion	5.97	$1.04 billion	$7.20	21.75
UGI	$7.21 billion	1.08	$269.00 million	$2.43	14.95

Atmos Energy has higher earnings, but lower revenue than UGI. UGI 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 UGI on 12 of the 18 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 UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.