American Electric Power (NASDAQ:AEP) and Atmos Energy (NYSE:ATO) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.
Analyst Ratings
This is a breakdown of recent ratings and target prices for American Electric Power and Atmos Energy, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
American Electric Power | 1 | 3 | 9 | 0 | 2.62 |
Atmos Energy | 0 | 1 | 5 | 0 | 2.83 |
American Electric Power presently has a consensus target price of $91.4615, suggesting a potential upside of 18.38%. Atmos Energy has a consensus target price of $109.4167, suggesting a potential upside of 24.24%. Given Atmos Energy's stronger consensus rating and higher probable upside, analysts clearly believe Atmos Energy is more favorable than American Electric Power.
Earnings & Valuation
This table compares American Electric Power and Atmos Energy's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
American Electric Power | $15.56 billion | 2.45 | $1.92 billion | $4.24 | 18.14 |
Atmos Energy | $2.82 billion | 4.00 | $601.44 million | $4.72 | 18.65 |
American Electric Power has higher revenue and earnings than Atmos Energy. American Electric Power is trading at a lower price-to-earnings ratio than Atmos Energy, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
American Electric Power has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Atmos Energy has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.
Dividends
American Electric Power pays an annual dividend of $2.96 per share and has a dividend yield of 3.8%. Atmos Energy pays an annual dividend of $2.50 per share and has a dividend yield of 2.8%. American Electric Power pays out 69.8% of its earnings in the form of a dividend. Atmos Energy pays out 53.0% 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 34 consecutive years.
Institutional & Insider Ownership
75.0% of American Electric Power shares are held by institutional investors. Comparatively, 86.4% of Atmos Energy shares are held by institutional investors. 0.2% of American Electric Power shares are held by insiders. Comparatively, 1.2% of Atmos Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares American Electric Power and Atmos Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
American Electric Power | 12.82% | 10.19% | 2.66% |
Atmos Energy | 21.32% | 9.04% | 3.91% |
Summary
Atmos Energy beats American Electric Power on 11 of the 17 factors compared between the two stocks.