Atmos Energy (ATO) ZACKS·2025-04-04 12:55Core Viewpoint - The imposition of "Liberation Day" tariffs by President Trump has led to significant declines in major stock indexes, raising concerns about potential economic impacts, particularly on inflation and the risk of recession or stagflation in the U.S. economy [1][3]. Economic Impact - A baseline tariff of 10% will be applied to all imports starting April 5, with rates potentially rising to 54% depending on the tariffs imposed by other countries on U.S. exports [2]. - Economists express concerns that these tariffs could exacerbate inflation, which remains high despite a 1% interest rate cut by the Federal Reserve last year [3]. Investment Strategy - In light of market volatility, investment in low-beta stocks with high dividend yields is recommended as a strategy to mitigate risks and provide regular income [4]. - If market conditions improve, these stocks are expected to capture upside potential, while their low-beta nature can help minimize losses during downturns [4]. Utility Sector Overview - The utility sector is characterized by mature and fundamentally strong companies that provide essential services, making them less sensitive to economic cycles [6]. - Utilities are known for stable earnings and cash flows, which enable consistent dividend payments, appealing to income-oriented investors [7]. Recommended Utility Stocks - Five low-beta, high-yielding utility stocks are highlighted for their strong growth potential and positive earnings estimate revisions: Atmos Energy Corp. (ATO), WEC Energy Group Inc. (WEC), Exelon Corp. (EXC), CMS Energy Corp. (CMS), and CenterPoint Energy Inc. (CNP) [5][8]. Atmos Energy Corp. (ATO) - ATO benefits from rising natural gas demand and has a long-term investment plan to enhance pipeline reliability [12]. - The company is expanding its renewable natural gas operations and has a current dividend yield of 2.24% with expected revenue and earnings growth rates of 16.5% and 5.1%, respectively [14]. WEC Energy Group Inc. (WEC) - WEC's strategic investments in infrastructure and renewable assets are expected to support its growth and help achieve net carbon neutrality by 2050 [15]. - The company has a current dividend yield of 3.28% and expected revenue and earnings growth rates of 9.2% and 8.5%, respectively [17]. Exelon Corp. (EXC) - EXC is focused on strengthening its transmission and distribution infrastructure, with initiatives aimed at grid modernization [18]. - The expected revenue and earnings growth rates for EXC are 3.4% and 6.4%, respectively, with a current dividend yield of 3.48% [19]. CMS Energy Corp. (CMS) - CMS plans to invest $20 billion in infrastructure upgrades and clean energy generation from 2025 to 2029 [20]. - The expected revenue and earnings growth rates for CMS are 7.3% and 7.8%, respectively, with a current dividend yield of 2.91% [21]. CenterPoint Energy Inc. (CNP) - CNP is poised to benefit from increasing electricity demand and is investing in infrastructure upgrades to support long-term growth [23]. - The expected revenue and earnings growth rates for CNP are 3.2% and 8%, respectively, with a current dividend yield of 2.38% [26].