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

Volatility and Risk

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Atmos Energy has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, Just Energy has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Atmos Energy N/A 10.39% 3.93%
Just Energy 5.74% -214.69% 23.59%

Dividends

Atmos Energy pays an annual dividend of $1.94 per share and has a dividend yield of 2.3%. Just Energy pays an annual dividend of $0.39 per share and has a dividend yield of 8.7%. Atmos Energy pays out 53.9% of its earnings in the form of a dividend. Just Energy pays out 118.2% 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 has raised its dividend for 35 consecutive years and Just Energy has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Atmos Energy and Just Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atmos Energy 1 1 3 0 2.40
Just Energy 0 1 6 0 2.86

Atmos Energy presently has a consensus price target of $84.00, suggesting a potential downside of 1.36%. Just Energy has a consensus price target of $7.75, suggesting a potential upside of 73.38%. Given Just Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Just Energy is more favorable than Atmos Energy.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atmos Energy $2.76 billion 3.42 $396.42 million $3.60 23.66
Just Energy $2.84 billion 0.23 $340.07 million $0.33 13.55

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

Institutional & Insider Ownership

72.8% of Atmos Energy shares are owned by institutional investors. Comparatively, 30.5% of Just Energy shares are owned by institutional investors. 1.4% of Atmos Energy shares are owned 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.

Summary

Atmos Energy beats Just Energy on 9 of the 17 factors compared between the two stocks.

Atmos Energy 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.

Just Energy Company Profile

Just Energy Group Inc., through its subsidiaries, provides electricity, natural gas, and renewable energy solutions in the United States, Canada, the United Kingdom, Ireland, Germany, and Japan. It operates through Consumer Energy and Commercial Energy segments. The company offers various home and business energy solutions, including long-term fixed-price, variable-price, and flat-bill solutions to residential and commercial customers. It also provides solar energy solutions; carbon emissions solutions, such as carbon offsets and renewable energy credits; and smart thermostats. As of May 17, 2017, the company served two million residential and commercial customers. It markets its products through various sales channels comprising door-to-door marketing, brokers, online marketing, and others. The company was founded in 1997 and is based in Mississauga, Canada.

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