Up to date on March third, 2025 by Felix Martinez
The Dividend Aristocrats are a bunch of shares within the S&P 500 Index with 25+ years of consecutive dividend will increase. These corporations have high-quality enterprise fashions which have stood the check of time and proven a outstanding capability to lift dividends yearly whatever the economic system.
Now we have compiled an inventory of all 69 Dividend Aristocrats, together with related monetary metrics like dividend yield and P/E ratios. You’ll be able to obtain the complete Dividend Aristocrats listing by clicking on the hyperlink beneath:
Disclaimer: Positive Dividend shouldn’t be affiliated with S&P International in any means. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Positive Dividend’s personal assessment, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the info on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official info.
The listing of Dividend Aristocrats is diversified throughout a number of sectors, together with client items, financials, industrials, and healthcare. Surprisingly, the utility sector is underrepresented.
Solely three utility shares are on the listing of Dividend Aristocrats: Consolidated Edison (ED), NextEra Power (NEE), and Atmos Power (ATO).
Solely three utilities are on the listing, which can come as a shock, particularly since utilities are extensively thought to be regular dividend shares. This text will focus on Atmos Power’s path to changing into a Dividend Aristocrat.
Enterprise Overview
Atmos Power was shaped in 1906 in Texas. Since then, it has grown organically and thru mergers. As we speak, Atmos Power distributes and shops pure fuel in eight states, serving over 3 million clients.
As well as, Atmos owns about 5,700 miles of pure fuel transmission traces. The utility ought to generate about $4.8 billion in income final 12 months. The corporate serves over 3 million pure fuel clients in eight states.
Supply: Investor Presentation
Atmos posted first quarter earnings on February fifth, 2025. The corporate reported reported fiscal 2025 Q1 earnings of $2.23 per diluted share, with a internet revenue of $351.9 million. Capital expenditures reached $891.2 million, with 86% devoted to security and reliability. The corporate maintains sturdy financials, with 60.3% fairness capitalization and $5.2 billion in liquidity, alongside $150.5 million in annualized regulatory outcomes.
The corporate reaffirmed its fiscal 2025 earnings steerage of $7.05–$7.25 per diluted share and expects $3.7 billion in capital expenditures. The Board declared a quarterly dividend of $0.87 per share, elevating the annual dividend to $3.48, an 8.1% improve from 2024.
CEO Kevin Akers highlighted the corporate’s ongoing dedication to security, reliability, and modernization, crediting its 5,300 staff for delivering sturdy outcomes that profit clients and communities.
Development Prospects
Earnings progress throughout the utility business usually mimics GDP progress, plus a few share factors. Nonetheless, we anticipate Atmos Power to proceed outperforming this development as a result of its give attention to capital funding in its regulated operations, a constructive regulatory surroundings in Texas, and inhabitants progress.
In consequence, the corporate ought to profit from sturdy price base progress, which can generate annual earnings per share progress in accordance with administration’s 6%—8% steerage.
New clients, price will increase, and aggressive capital expenditures are Atmos Power’s progress drivers. One advantage of working in a regulated business is that utilities are permitted to lift charges frequently, which just about assures a gentle stage of progress.
Supply: Investor Presentation
The corporate’s major threat is its capability to attain well timed and constructive regulatory price changes. If it achieves decrease than anticipated allowed returns, this might considerably hurt earnings.
Nonetheless, we imagine Atmos can obtain at the least 7% annual EPS progress through continued enhancements in gross margin, reductions in working prices as a share of income, and top-line progress through acquisitions and natural buyer progress.
The corporate continues to file favorable price instances with its numerous localities, which additionally present for small income will increase over time, as we noticed once more in fiscal 2024 full–12 months outcomes.
Aggressive Benefits & Recession Efficiency
Atmos Power’s predominant aggressive benefit is the utility business’s excessive regulatory hurdles. Gasoline service is important and important to society. In consequence, the business is extremely regulated, making it just about not possible for a brand new competitor to enter the market. This supplies nice certainty to Atmos Power and its annual earnings.
One other aggressive benefit is the corporate’s secure enterprise mannequin and sound steadiness sheet, giving it a beautiful price of capital. This permits it to fund accretive acquisitions and progress capital expenditures, driving outsized earnings per share progress.
As well as, the utility enterprise mannequin is extremely recession-resistant. Whereas many corporations skilled massive earnings declines in 2008 and 2009, Atmos Power’s earnings per share stored rising. Earnings-per-share throughout the Nice Recession are proven beneath:
2007 earnings-per-share of $1.91
2008 earnings-per-share of $1.99 (4% progress)
2009 earnings-per-share of $2.07 (4% progress)
2010 earnings-per-share of $2.20 (6% progress)
The corporate nonetheless generated wholesome progress even throughout the worst of the financial downturn. Outcomes remained resilient and continued to develop throughout the pandemic, demonstrating Atmos’ property’ mission-critical nature.
This resilience has allowed Atmos Power to proceed rising its dividend annually throughout these unfavorable market environments.
Valuation & Anticipated Returns
Atmos Power is anticipated to earn $7.20 this 12 months. Based mostly on this, the inventory trades with a price-to-earnings ratio of 21.3x. That is above our truthful worth estimate of 19x earnings, and above the 10-year common price-to-earnings ratio for the inventory.
In consequence, Atmos Power shares look like overvalued. If the inventory valuation compresses from 21.3 to 19 over the following 5 years, the corresponding a number of compression would lower annual returns by 1.6%. This may very well be a slight headwind for future returns.
Thankfully, the inventory may nonetheless present constructive returns to shareholders, by earnings progress and dividends. We anticipate the corporate to develop earnings by 7% per 12 months over the following 5 years.
As well as, the inventory has a present dividend yield of two.3%. ATO has elevated its dividend for 41 consecutive years.
Placing all of it collectively, Atmos Power’s complete anticipated returns may appear to be the next:
7% earnings progress
1.6% P/E a number of compression
2.3% dividend yield
Added up, Atmos Power is anticipated to generate 7.7% annualized complete returns over the following 5 years, which doesn’t make the inventory engaging for buyers eager about dividend progress and complete returns.
The dividend yield shouldn’t be substantial however stays engaging, whereas the dividend seems comparatively secure. The corporate has projected a 2025 payout ratio of ~48%, indicating a sustainable dividend. In consequence, we view Atmos Power as a blue-chip inventory.
Remaining Ideas
Atmos Power inventory is engaging for buyers on the lookout for an above-average yield and common dividend progress. Due to this, it might serve a helpful objective in an revenue investor’s portfolio. The inventory affords a really safe and rising dividend revenue stream, and its dividend yield is properly above the common dividend yield of the S&P 500 Index.
Be aware: Atmos Power additionally ranks properly utilizing The Chowder Rule.
Atmos Power can also be a Dividend Aristocrat and will elevate its dividend annually. With five-year anticipated returns of 11% per 12 months, ATO inventory is a purchase.
Moreover, the next Positive Dividend databases comprise essentially the most dependable dividend growers in our funding universe:
In case you’re on the lookout for shares with distinctive dividend traits, think about the next Positive Dividend databases:
The foremost home inventory market indices are one other strong useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month:
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