WGL Holdings (NYSE: WGL) and Atmos Energy Corporation (NYSE:ATO) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitabiliy, valuation and institutional ownership.
Profitability
This table compares WGL Holdings and Atmos Energy Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| WGL Holdings | 7.46% | 12.25% | 2.86% |
| Atmos Energy Corporation | N/A | 10.86% | 3.85% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for WGL Holdings and Atmos Energy Corporation, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WGL Holdings | 1 | 3 | 0 | 0 | 1.75 |
| Atmos Energy Corporation | 1 | 1 | 3 | 0 | 2.40 |
WGL Holdings presently has a consensus target price of $71.00, suggesting a potential downside of 15.48%. Atmos Energy Corporation has a consensus target price of $83.40, suggesting a potential downside of 0.71%. Given Atmos Energy Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Atmos Energy Corporation is more favorable than WGL Holdings.
Dividends
WGL Holdings pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. WGL Holdings pays out 60.2% of its earnings in the form of a dividend. Atmos Energy Corporation pays out 47.9% 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. WGL Holdings has raised its dividend for 40 consecutive years and Atmos Energy Corporation has raised its dividend for 34 consecutive years. WGL Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
WGL Holdings has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Atmos Energy Corporation has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.
Earnings and Valuation
This table compares WGL Holdings and Atmos Energy Corporation’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| WGL Holdings | $2.35 billion | 1.83 | $451.36 million | $3.39 | 24.78 |
| Atmos Energy Corporation | $3.55 billion | 2.49 | $1.02 billion | $3.76 | 22.34 |
Atmos Energy Corporation has higher revenue and earnings than WGL Holdings. Atmos Energy Corporation is trading at a lower price-to-earnings ratio than WGL Holdings, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
68.0% of WGL Holdings shares are held by institutional investors. Comparatively, 71.8% of Atmos Energy Corporation shares are held by institutional investors. 1.0% of WGL Holdings shares are held by company insiders. Comparatively, 1.6% of Atmos Energy Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
Atmos Energy Corporation beats WGL Holdings on 11 of the 17 factors compared between the two stocks.
About WGL Holdings
WGL Holdings, Inc. (WGL) is a holding company. The Company operates through four segments. The Regulated Utility segment consists of Washington Gas Light Company, which provides regulated gas distribution services to end use customers and natural gas transportation services to an unaffiliated natural gas distribution company and Hampshire Gas Company, which provides regulated interstate natural gas storage services. The Retail Energy-Marketing segment consists of the operations of WGL Energy Services, Inc., which sells natural gas and electricity directly to retail customers. The Commercial Energy Systems segment consists of the operations of WGL Energy Systems, Inc., WGSW, Inc. and the results of operations of affiliate-owned commercial distributed energy projects. The Midstream Energy Services segment consists of the operations of WGL Midstream, Inc., which engages in acquiring, investing in, managing and optimizing natural gas storage and transportation assets.
About Atmos Energy Corporation
Atmos Energy Corporation is engaged primarily in the regulated natural gas distribution and pipeline businesses, as well as other nonregulated natural gas businesses. The Company operates through three segments: regulated distribution segment, which includes its regulated distribution and related sales operations; regulated pipeline segment, which includes the pipeline and storage operations of its Atmos Pipeline-Texas Division, and nonregulated segment, which includes its nonregulated natural gas management, nonregulated natural gas transmission, storage and other services. The Company’s nonregulated businesses provide natural gas management, marketing, transportation and storage services to municipalities, local gas distribution companies, including certain of its natural gas distribution divisions and industrial customers principally in the Midwest and Southeast.
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