Core Viewpoint - Atmos Energy Corporation (ATO) is recognized as a leading US company in the regulated natural gas utilities sector, with a strong history of consistently increasing earnings per share [1]. Company Summary - Atmos Energy has demonstrated an impressive track record in financial performance, particularly in earnings per share growth [1].

Core Viewpoint - Atmos Energy Corporation (NYSE: ATO) is experiencing mixed analyst calls, with UBS raising its price target while Morgan Stanley downgrades its rating, reflecting differing outlooks on the utility sector and company performance [1][2]. Analyst Ratings - UBS raised its price target on Atmos Energy to $174 from $159, maintaining a Neutral rating, indicating a more positive view on valuation despite ongoing sector risks [1]. - Morgan Stanley downgraded Atmos Energy to Equal Weight from Overweight and reduced its price target to $172 from $182, citing expectations for utility stock performance influenced by data center demand and regulatory risks in an election year [2]. Operational Performance - Atmos Energy reported its Q4 2025 earnings, marking the 14th consecutive year of executing its strategy focused on safety and reliability, with capital spending in FY25 totaling $3.6 billion, of which 87% was allocated to safety and reliability investments [3]. Shareholder Returns - Atmos Energy announced a 15% increase in its quarterly dividend, extending its dividend growth streak to 41 consecutive years, which is significant for income-focused investors [4].

Core Insights - The article discusses the advantages of investing in dividend aristocrat stocks, which are companies that have consistently raised their dividends for at least 25 years, highlighting their strong performance compared to broader market benchmarks [2][4]. Dividend Aristocrats Performance - The S&P 500 Dividend Aristocrats Index has outperformed the S&P 500 on a risk-adjusted basis, capturing about 90% of market upside while absorbing only 83% of downside [2]. - In 2022, a challenging year for equities, Dividend Aristocrats outperformed the S&P 500 by over 12% [3]. - The index has shown better performance than the broader market in eight of the ten worst quarterly drawdowns since 2005 [3]. Income Advantage - Companies that consistently raise dividends tend to provide a higher yield on cost over time compared to those with high initial yields but inconsistent growth [4]. Methodology for Stock Selection - The article identifies 14 dividend aristocrat stocks with the strongest upside potential as of December 22, based on the number of hedge fund investors [6]. Federal Realty Investment Trust (NYSE:FRT) - Federal Realty Investment Trust has an upside potential of 9.2% and is held by 31 hedge funds [8]. - The price target for Federal Realty was raised to $109.50 from $104.50 following the sale of properties for $170 million [9]. - The company focuses on quality properties in high-density areas, owning 103 properties with approximately 3,600 tenants across 27.9 million commercial square feet [10]. - Federal Realty has a long history of shareholder returns, having raised its payout for 58 consecutive years [11]. Hormel Foods Corporation (NYSE:HRL) - Hormel Foods has an upside potential of 15.7% and is held by 32 hedge funds [13]. - Barclays lowered its price target on Hormel to $30 from $31, reflecting a cautious outlook for the agribusiness sector [14]. - Hormel completed a transaction involving the JUSTIN'S brand, allowing for growth while retaining a stake [15][16]. Atmos Energy Corporation (NYSE:ATO) - Atmos Energy has an upside potential of 7.64% and is held by 32 hedge funds [17]. - UBS raised its price target on Atmos to $174 from $159, while Morgan Stanley downgraded it to Equal Weight and cut its price target to $172 from $182 [18]. - The company reported a 15% increase in its quarterly dividend, extending its growth streak to 41 consecutive years [20].

Economic Overview - Consumer confidence in the United States fell to 89.1 in December, a decline of 3.8 points from November's 92.9, indicating growing concerns over jobs and income amid a weakening economy [4][10] - The Present Situation Index dropped 9.5 points to 116.8, reflecting a negative assessment of current business and labor market conditions [4] - The Expectations Index remained unchanged at 70.7, staying below the 80 mark for 11 consecutive months, which signals a potential recession [5] Federal Reserve Actions - The Federal Reserve cut interest rates by 25 basis points three times in the current year but indicated only one rate cut for the next year due to persistent high inflation [5][6] Market Trends - A significant tech selloff has occurred, with investors offloading tech stocks due to concerns over profitability against high valuations, leading to a loss of momentum in the tech rally [6][10] Investment Recommendations - Investors are advised to focus on low-beta, defensive stocks from the utility and consumer staples sectors to mitigate market volatility [2][10] - Recommended stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth rate of 6.7%, beta of 0.75, and a dividend yield of 2.38% [8][7] - **American States Water Company (AWR)**: Expected earnings growth rate of 5.1%, beta of 0.70, and a dividend yield of 2.76% [12][11] - **Sempra (SRE)**: Expected earnings growth rate of 12.1%, beta of 0.73, and a dividend yield of 2.91% [13] - **Ingredion Incorporated (INGR)**: Expected earnings growth rate of 1.6%, beta of 0.72, and a dividend yield of 2.94% [14]

Core Viewpoint - Atmos Energy (ATO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The upgrade in ratings and rising earnings estimates suggest an improvement in Atmos Energy's underlying business, which could lead to higher stock prices as investors respond positively [4]. Importance of Earnings Estimate Revisions - Tracking earnings estimate revisions is crucial for investment decisions, and the Zacks Rank system effectively leverages this information [5]. - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance of Zacks Rank 1 stocks averaging a +25% annual return since 1988 [6]. Specific Earnings Estimates for Atmos - For the fiscal year ending September 2026, Atmos Energy is expected to earn $8.02 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.7% over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across over 4,000 stocks, with only the top 20% receiving a "Strong Buy" or "Buy" rating [8][9]. - Atmos Energy's upgrade to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Core Perspective - Atos Group has signed a binding agreement to sell its South American operations to Brazilian company Semantix, which is part of Atos's Genesis Transformation plan aimed at sustainable growth and improved profitability [1][4]. Group 1: Transaction Details - The sale involves approximately 2,800 professionals across Brazil, Argentina, Chile, Colombia, Uruguay, and Peru [1]. - The transaction is expected to close in the coming months, pending fulfillment of closing conditions [3]. Group 2: Strategic Implications - This divestment allows Atos to refocus on core geographies and assets, particularly in AI and cloud-enabled solutions [1]. - Semantix will expand its portfolio and become one of South America's largest AI & Data Enterprise services providers, enhancing its geographic coverage and technology ecosystem [2]. Group 3: Leadership Changes - Nelson Campelo, currently Head of Atos South America, will become CEO of Semantix, while Leonardo Santos Poça D'água will transition to Executive Chairman, focusing on long-term strategy and innovation [3]. Group 4: Market Impact - The agreement is seen as a historic milestone for the technology market in Brazil, positioning Semantix as a leading regional player with enhanced capabilities in delivering AI solutions to regulated sectors [4].

Core Viewpoint - Investors are evaluating which stock presents a better value opportunity between Spire (SR) and Atmos Energy (ATO) in the Utility - Gas Distribution sector [1] Group 1: Valuation Metrics - Both Spire and Atmos Energy currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - Spire has a forward P/E ratio of 15.68, while Atmos Energy has a forward P/E of 20.80, suggesting Spire may be undervalued compared to Atmos Energy [5] - The PEG ratio for Spire is 1.49, compared to Atmos Energy's PEG ratio of 2.61, indicating Spire's earnings growth is more favorably priced [5] - Spire's P/B ratio is 1.55, while Atmos Energy's P/B ratio is 1.97, further supporting the notion that Spire is a more attractive value option [6] Group 2: Value Grades - Based on various valuation metrics, Spire holds a Value grade of B, whereas Atmos Energy has a Value grade of D, highlighting Spire as the superior value option [6]

Core Insights - Atos has been recognized as a 'Leader' in all market segments of NelsonHall's 2025 NEAT Evaluation for Transforming Business Operations with GenAI, highlighting its commitment to innovation and value delivery through advanced generative AI solutions [1][3] Group 1: Recognition and Leadership - Atos is identified as a leader in GenAI-enabled operational transformation due to its strong domain expertise and ability to operationalize advanced AI capabilities for clients [2] - The leadership position reflects Atos' robust capabilities in designing, implementing, and managing custom GenAI solutions tailored to diverse industries [3] Group 2: Strengths and Offerings - Atos has developed over 800 GenAI use cases, focusing on sectors such as finance, manufacturing, healthcare, and the public sector [5] - The company launched its GenAI accelerator program in late 2023, providing end-to-end consulting and a modular set of accelerators [6] - Key features of Atos' GenAI portfolio include support for image generation capabilities in production environments and flexible hosting options [6][8] Group 3: Strategic Direction - Atos aims for 100% GenAI awareness among employees by the end of 2025 as part of its workforce enablement strategy [6] - The company is engaged in large-scale transformation contracts and business consulting to identify GenAI adoption opportunities [7] - Atos collaborates with leading technology providers such as Azure, AWS, GCP, and others to enhance its service offerings [7]

Core Viewpoint - Atos Group has signed a binding agreement to sell Ideal GRP, a Nordic business, to MAIT Group as part of its transformation plan aimed at sustainable growth and improved profitability [1][3] Group 1: Company Overview - Atos Group is a global leader in AI-powered digital transformation with approximately 67,000 employees and annual revenue of around €10 billion, operating in 61 countries [4] - Ideal GRP, founded in 1992, operates under the Eviden brand and is active in Finland, Sweden, Norway, Denmark, and Estonia, generating approximately €20 million in annual revenue and employing around 80 people [2] Group 2: Transaction Details - The sale of Ideal GRP is part of Atos Group's 'Genesis' transformation plan, which focuses on core assets such as AI, cloud-enabled, and secure solutions [3] - The transaction is expected to close in the coming weeks, pending the fulfillment of all closing conditions [3] Group 3: Strategic Implications - The divestment allows Ideal GRP to complement MAIT Group's expertise in lifecycle management and supports MAIT Group's ambition to expand its activities in the Nordic region [3]

Industry Overview - Demand for natural gas is increasing in the U.S. and globally due to its clean-burning properties, driven by AI data centers, reshoring of industries, electric vehicle usage, and higher domestic demand during cold winters [1][11] - The U.S. Energy Information Administration (EIA) projects that natural gas will account for 40% of U.S. electricity generation in 2025 and 2026, as coal-fired generation units are phased out [2] - The natural gas distribution industry is crucial for delivering gas through a network of 2.5 million miles of pipelines across the U.S. [5] Investment Opportunities - Capital-intensive gas distribution utilities like Atmos Energy Corporation (ATO) and Spire Inc. (SR) are recommended for investment due to rising natural gas demand and favorable market conditions [3][8] - ATO plans to invest $26 billion by 2030, targeting 6-8% annual earnings growth and maintaining steady dividends [11][12] - SR has increased its capital investment plan to $11.2 billion, aiming for 5-7% adjusted EPS growth through fiscal 2035 [11][14] Financial Performance - ATO's current dividend yield is 2.34%, outperforming the S&P 500 composite's yield of 1.4%, with a beta of 0.75 indicating lower volatility [13] - SR's current dividend yield is 3.93%, with a long-term earnings growth rate projected at 10.54% and a beta of 0.66 [17] - Both companies have shown strong performance, outperforming the Zacks Utilities sector over the past six months [9]