Wondering if Atmos Energy’s current share price is offering a bargain or if it’s running too hot? You’re not alone; getting the right read on value is on every investor’s mind.
The stock has edged up 0.7% in the last week and 1.7% over the past month, adding to a strong year-to-date gain of 27.5%.
In recent news, industry discussion has focused on rising demand for natural gas utilities and regulatory developments impacting rates. Both factors have fueled optimism and caught the attention of analysts, who are monitoring Atmos’s regional growth. Significant changes in the sector have also prompted fresh debates about long-term risk and reward for utility stocks like Atmos.
When it comes to valuation, Atmos Energy currently scores 0 out of 6 on our checks for undervaluation. In the next sections, we’ll unpack what that means across different valuation approaches and later introduce a smarter way to interpret these numbers.
Atmos Energy scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Dividend Discount Model (DDM) is a valuation method that estimates a company’s intrinsic value by projecting future dividends and discounting them back to today’s value. This approach is particularly useful for established companies with a consistent history of dividend payments, such as Atmos Energy.
Atmos Energy’s DDM valuation highlights several important points for investors. The company’s most recent annual dividend per share is $4.49, with a payout ratio of about 47.3%. This level suggests dividends are reasonably sustainable relative to earnings and are supported by an estimated return on equity of 9%. For the DDM analysis, future dividend growth has been capped at 3.26%, down from a previous estimate of 4.75%. This indicates more conservative expectations for increases going forward.
According to the DDM, the fair value for Atmos Energy shares is estimated at $121.51. However, with the current share price significantly above this mark, the model implies the stock is about 45.2% overvalued on a fundamental, dividend-driven basis.
Result: OVERVALUED
Our Dividend Discount Model (DDM) analysis suggests Atmos Energy may be overvalued by 45.2%. Discover 914 undervalued stocks or create your own screener to find better value opportunities.
ATO Discounted Cash Flow as at Nov 2025
The Price-to-Earnings (PE) ratio is a fundamental metric for valuing established, profitable companies like Atmos Energy. It reflects how much investors are willing to pay for each dollar of a company’s current earnings, making it especially relevant for firms with consistent profitability and a track record of earnings growth.
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