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  • Atmos Energy: A Quality Company That's Overvalued [View article]
    Yes, its been a good run, but. . .
    1. P/E looks reasonable compared to peers
    2. Earnings growth forecasts seem reasonable
    3. Dividend payout ratio seems a bit on the low side vs. peers - it could increase without causing stress to the capital structure
    4. Dividend % is comparable to peers
    5. The mix of businesses is attractive - its almost exclusively Regulated (i.e. profitability is predictable and managed), and very little unregulated (i.e. subject to profit-eroding competition). This is a key change versus the past, when they had more unregulated businesses, which kept profitability lower and the share price depressed.

    These comparisons make me think that the share overperformance was actually "catch-up", and that now the shares are no longer more attractive (or less attractive) than their peers. No need to hit the panic button. . .

    A more relevant question has to do with the fact that the utilities sector has out-performed the overall market. Is it time to sell them all?
    (re. ATO: I don't own any nor do I intend to)
    May 6, 2013. 11:45 PM | Likes Like |Link to Comment
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