Atmos Energy Corporation (ATO)

[OilStockReport]

Atmos Energy Corporation (NYSE:ATO) has a less volatile earnings stream due to its regulated natural gas distribution businesses, and investors in the stock also get a 4.5% yield from a company that has raised its dividend every year for more than two decades.

Atmos Energy's main business is the distribution of natural gas to customers in 12 states in the Southeast and Midwest United States. The company also owns a natural gas pipeline in Texas and several storage facilities for natural gas. Various state entities regulate these businesses, and earnings from here will comprise between 75% and 80% of net income in 2011.

In the gas distribution business, Atmos Energy had a rate base of $3.7 billion as of Sept 30, 2009. The company projects that this rate base will grow at a compound annual growth rate as high as 4.4% over the next five years. The company also seeks to increase earnings here through adding customers to its existing network.

Atmos Energy also owns a 6,000-mile regulated pipeline in Texas. The company expects the pipeline to transport between 610 and 625 billion cubic feet of natural gas in 2010. Atmos Energy also owns five storage sites for natural gas with a capacity of 39 billion cubic feet.

Earnings
Atmos Energy earned $2.25 per share in fiscal 2010, excluding unrealized gains and losses. For fiscal 2011, the company has given guidance of $2.25 to $2.35 per share.

Non-Regulated
Atmos Energy also has a non-regulated set of businesses and will get approximately 20% to 25% of its income from here in 2011. These businesses include energy marketing and various pipeline and storage assets.

Dividend
Atmos Energy has a current dividend of $1.36 per share, giving investors a yield of 4.5 %. The company has increased its dividend for 23 consecutive years, and has a payout ratio in the 60% range.