If you are a consumer interested in natural gas, you’re probably wondering about Atmos Energy Corporation. The company is making strides to meet the needs of consumers in a sustainable way. These efforts include investing in sustainability programs and modernizing its infrastructure to prevent leaks and save money on maintenance. Atmos Energy is also looking at renewable natural gas as a potential alternative in its distribution network. This type of natural gas is produced from a renewable resource and has fewer emissions than conventional natural gas.
Atmos Energy Corporation
Atmos Energy Corporation is a leading natural gas distributor with operations in several states. They safely deliver a safe, reliable, efficient, and abundant supply of natural gas to more than 3 million customers. In addition to the company’s central Amarillo headquarters, it also has subsidiaries in Kansas, Missouri, and Oklahoma. In addition to delivering natural gas, they also operate one of the nation’s largest intrastate pipeline systems. To date, the company has grown from humble beginnings to an industry giant.
The merger of the Atmos Energy Corporation and Energies Company consolidated several companies into one conglomerate. By 1998, Atmos had become the 12th largest natural gas utility in the country. Atmos sought to develop uniform procedures and new technologies to improve customer service. The new CIS system, hand-held meter reading devices, and mobile data terminals for in-field service were part of the company’s customer service initiative. The company also developed infrastructure for its CIS, including a centralized call center in Amarillo. The two companies were initially separate entities, but by the end of the decade, Atmos’s network had grown to over 375 cities in the Midwest and southeastern states.
Trans Louisiana Gas Company
In October 2016, Atmos Energy and Trans Louisiana Gas Company completed the acquisition of a natural gas distribution company and became one. The companies serve Louisiana, Texas, Tennessee, Kentucky, and Georgia. As part of the merger, Atmos completed its asset acquisition of the Louisiana Gas Service Company and LGS Natural Gas Company. They then combined their operations and became the largest pure gas distributor in Louisiana. The transaction is subject to state and federal regulatory approval. The two companies will become one under the same name.
Western Kentucky Gas Company
The utility has made improvements to its infrastructure after receiving approval from the PSC for a Pipeline Replacement Program. The plan is to replace bare steel and old infrastructure with new HDPE pipe. Atmos Energy began replacing bare steel pipe on May 4 and has already replaced 3,877 feet of line. The utility is working with individual homeowners to determine how they can be impacted by the project. This report summarizes those changes.
A few years ago, the state of Georgia enacted legislation deregulating natural gas distribution and sold the company to Atmos Energy Corporation. Since then, the company has continued to expand its business, adding new customers, expanding services, and improving efficiency. However, since Atmos’s IPO, it has been under a cloud. Atmos’s stock price has dropped significantly, and the company is in a state of transition. Its stock remains volatile, but it remains profitable, despite the recent slew of acquisitions.
Free cash flow
Atmos Energy’s free cash flow analysis reveals that this gas utility company is not paying out the majority of its free cash flow as dividends. Despite this, its value is based on a Gordon Growth Model that assumes that dividend payments will continue to increase for years. In other words, free cash flow is a better way to determine the company’s value than a dividend per share calculation. The following table reveals Atmos Energy’s free cash flow and its current value.
Atmos Energy has a strong customer base, has consistently earned above-allowed returns, and has one of the most competitive regulatory environments in the industry. Its management is committed to the long-term growth of its business and stewardship of its shareholders’ capital. Over the next five years, Atmos plans to invest $12.3 billion in its business, 85% of which will go toward improving safety and reliability. As a result, Atmos has a strong balance sheet and has a conservative payout ratio.