Investors in the gas utility sector have several options when looking at individual stock investments. Utility companies tend to be more stable than other market segments, but that does not mean there’s no potential for growth. As a result, gas utility stocks offer an excellent opportunity for investors with a long-term outlook and knowledge of risk. As with any investment, it’s essential to understand your risk level before you make a final decision. Here are some of the best gas utility stocks to buy in 2022 and beyond.
Atmos Energy (ATO)
Atmos Energy is one of the largest natural gas utilities in the US and is listed on the New York Stock Exchange. Atmos serves over 2 million customers in Texas, Oklahoma, Kansas, Colorado, and New Mexico. In June 2018, Atmos announced a planned acquisition of Enova Energy, another natural gas utility serving approximately 86,000 customers in New Mexico. This acquisition, combined with steady revenue growth through 2020, positions Atmos well to grow earnings and cash flows over the next five years. Atmos is currently trading at a 12-month price-to-earnings ratio of 17.5, a five-year dividend yield of 3.5%, and an S&P credit rating of BBB-.
Suburban Propane Partners (SPH)
Suburban Propane Partners is a diversified energy and logistics company serving the wholesale and retail propane industries. SPH currently operates 30 propane convenience stores and has plans to open another 20 locations. The company also services over 6,000 customers with propane delivery. In addition to its propane operations, SPH owns a natural gas pipeline and two natural gas processing facilities. SPH is also a distributor of butane and ethane. Analysts expect the company to experience steady revenue and earnings growth through 2020. SPH is currently trading at a 12-month price-to-earnings ratio of 22.4, a five-year dividend yield of 4.3%, and an S&P credit rating of BBB-.
Brookfield Infrastructure (BIPC)
Brookfield Infrastructure is one of the world’s leading owners of utilities and transportation-related assets. The company owns and operates over 90 investments in 14 countries, including electricity, natural Gas, other utility assets, railroads, ports, and toll roads. Brookfield Infrastructure has a large and diverse portfolio of assets experiencing increasing demand, particularly in the Asian market. The company is expected to report steady revenue and earnings growth through 2020, and it is currently trading at a 12-month price-to-earnings ratio of 20.9, a five-year dividend yield of 4.3%, and an S&P credit rating of BBB-.
ONE Gas (OGS)
ONE Gas is a regulated utility that operates a natural gas distribution network to over 1.4 million customers in Texas. The company is listed on the New York Stock Exchange and has seen steady revenue and earnings growth over the last few years. ONE Gas is trading at a 12-month price-to-earnings ratio of 18.7, a five-year dividend yield of 3.4%, and an S&P credit rating of A-. Even though natural gas utilities are generally a safe bet, it’s essential to understand your risk level and the risk associated with individual stocks. This is especially true for long-term investment horizons that include economic, political, and regulatory risks. Natural gas utilities are an excellent, long-term investment opportunity.