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Atmos Energy inks $1.7 billion equity distribution deal

EditorNatashya Angelica
Published 03/12/2024, 17:06
ATO
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Proceeds from the direct sale of shares are intended for capital investments to bolster the safety and reliability of Atmos Energy (NYSE:ATO)'s service system and for other general corporate purposes. The company's strong financial position is underscored by its impressive dividend history, having raised dividends for 32 consecutive years - one of several key insights available through InvestingPro's extensive analysis tools.

This new agreement succeeds a previous $1 billion at-the-market offering program concluded earlier this year. Atmos Energy may conduct sales on the New York Stock Exchange, either directly or via block trades, with a commission rate of 1.00% on the gross proceeds to the sales agents. InvestingPro analysis indicates the company maintains a GOOD financial health score, suggesting strong operational stability.

For detailed insights into Atmos Energy's financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The arrangement also allows for forward sale agreements, where third-party borrowed shares are sold to hedge the agreement. Although Atmos Energy will not immediately benefit financially from these borrowed shares' sales, it anticipates future proceeds upon settlement of the forward sale agreements.

Some of the financial institutions involved have previously provided various services to Atmos Energy and may receive customary compensation for these services. Additionally, affiliates of some managers are connected to Atmos Energy's credit facilities and may benefit if proceeds are used to repay debts under these facilities.

The shares will be issued under an automatic shelf registration statement filed with the SEC on the same day as the agreement. This news article is based on a press release statement.

In other recent news, Atmos Energy Corporation has seen multiple positive developments. Mizuho (NYSE:MFG) Securities has raised its price target for Atmos Energy to $165, citing strong financial performance and guidance.

The company reported an earnings per share (EPS) of $6.83 for fiscal 2024, surpassing estimates and its own guidance range. Looking forward, Atmos Energy's EPS guidance for fiscal 2025 is 7.4% higher than the normalized fiscal 2024 figures, demonstrating consistent growth.

In addition to its strong earnings, Atmos Energy has also announced a significant $24 billion capital investment plan for the next five years, focusing on safety and system modernization. The plan marks a substantial 41% increase from the previous plan, demonstrating the company's commitment to growth and infrastructure improvement.

These recent developments reflect Atmos Energy's consistent ability to meet and exceed targets, according to Mizuho's analysis. While the company maintains a conservative stance on its EPS growth outlook, its updated guidance and significant capital expenditure plan demonstrate a strong and positive trajectory. As always, these are company projections and may be subject to change.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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