Analyzing Questar (STR) & Atmos Energy Corporation (ATO)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Questar 19.01% 9.76% 3.19%
Atmos Energy Corporation N/A 10.59% 3.80%

Analyst Recommendations

This is a breakdown of current ratings for Questar and Atmos Energy Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Questar 0 1 0 0 2.00
Atmos Energy Corporation 1 1 3 0 2.40

Questar presently has a consensus target price of $25.00, indicating a potential downside of 0.24%. Atmos Energy Corporation has a consensus target price of $85.40, indicating a potential downside of 2.62%. Given Questar’s higher possible upside, equities research analysts plainly believe Questar is more favorable than Atmos Energy Corporation.

Institutional & Insider Ownership

78.9% of Questar shares are held by institutional investors. Comparatively, 71.1% of Atmos Energy Corporation shares are held by institutional investors. 0.4% of Questar 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Questar and Atmos Energy Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Questar N/A N/A N/A $1.11 22.58
Atmos Energy Corporation $3.62 billion 2.57 $1.04 billion $3.74 23.45

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

Dividends

Questar pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Atmos Energy Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Questar pays out 79.3% 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 Corporation pays out 48.1% of its earnings in the form of a dividend. Questar has raised its dividend for 34 consecutive years and Atmos Energy Corporation has raised its dividend for 37 consecutive years.

Volatility & Risk

Questar has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Atmos Energy Corporation has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Summary

Atmos Energy Corporation beats Questar on 9 of the 14 factors compared between the two stocks.

Questar Company Profile

Dominion Questar Corp, formerly Questar Corporation, is an integrated natural gas holding company. The Company, through its subsidiaries is principally engaged in three lines of business, which include Questar Gas Company (Questar Gas), which provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro Company (Wexpro), which develops and produces natural gas from cost-of-service reserves for Questar Gas customers, and Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western the United States and provides other energy services. The Company is also engaged in Corporate and Other operations, which include Questar Fueling Company (Questar Fueling) that builds, owns and operates compressed natural gas (CNG) fueling stations for fleet operators with medium- and heavy-duty trucks and tractors. Questar Gas distributes gas to customers along the Wasatch Front, Provo, Salt Lake, Ogden and other areas in Utah.

Atmos Energy Corporation Company Profile

Atmos Energy Corporation is a fully-regulated, natural-gas-only distributor engaged primarily in the regulated natural gas distribution and pipeline businesses, as well as other nonregulated natural gas businesses. It operates through three segments: regulated distribution segment, which includes its regulated distribution and related sales operations; regulated pipeline segment, which includes 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. Its nonregulated businesses provide natural gas management, transportation and storage services to local gas distribution companies, including certain of its natural gas distribution divisions and industrial customers in the Midwest and Southeast. It also manages its natural gas pipeline and storage assets, including its intrastate natural gas pipeline systems in Texas.

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