ONE Gas (OGS) Rides on Regulated Operations, Customer Growth

ONE Gas, Inc.’s OGS ongoing capital expenditures for pipeline integrity and extension of services to new areas will further boost its performance. The company is expected to benefit from 100% regulated operations and a high percentage of residential customers.

However, this currently Zacks Rank #3 (Hold) company has to face risks related to the seasonality of its business and competition from other clean energy sources.


ONE Gas anticipates capital expenditures, including asset removal costs, to be approximately $750 million in 2024. It expects capital expenditures to be $4.25 billion or in the range of $750-$950 million per year during 2024-2028.

The ongoing capital expenditures are directed toward pipeline integrity, extension of services to new areas, increase in system capacity, pipeline replacements, automated meter reading, government-mandated pipeline relocations, facilities, information technology assets and cybersecurity.

This 100% regulated natural gas distribution utility has a high percentage of residential customers, providing stability and strong visibility of future earnings. More than 93% of the company’s customers are from the residential category.

OGS has been steadily increasing its customer base every year since 2015 and expects an average annual customer growth of 0.9% for 2024-2028 across its service territories, with 23,000 new customers added in 2023.


The natural gas industry is highly competitive and the company has to compete against a large number of contenders to retain customers and prove the reliability of its services.

The sale of natural gas to residential and commercial customers is a seasonal business, as a substantial portion of their natural gas requirements are for heating. Also, a warmer-than-expected winter would have an adverse impact on OGS’ profitability.

Stocks to Consider

Some better-ranked stocks from the same sector are Atmos Energy ATO, MDU Resources Group MDU and NiSource Inc. NI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ATO’s long-term (three to five years) earnings growth rate is 7.26%. The Zacks Consensus Estimate for ATO’s fiscal 2024 EPS implies a year-over-year improvement of 8%.

MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS implies a year-over-year decrease of 0.7%.

NiSource’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for NI’s 2024 EPS indicates year-over-year growth of 6.9%.


Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.

See Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NiSource, Inc (NI) : Free Stock Analysis Report

Atmos Energy Corporation (ATO) : Free Stock Analysis Report

MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report

ONE Gas, Inc. (OGS) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.