UGI Corp.

Company Description

UGI Corp., through its subsidiaries, engages in the distribution and sale energy products like propane and electricity in the United States and internationally. The company was founded in 1882 and has a market cap $2.87 billion.

UGI demonstrated its ability to produce solid results in a tough environment on Jan 28 when the company reported solid first-quarter results that were ahead of estimates.

Net income came in at $114.9 million, a big jump from last year's $80 million. This produced earnings of 95 cents per share, ahead of the consensus estimate by 21 cents.

Growth Drivers

UGI made a couple of interesting comments during the earnings call, saying that it was able to expand its margins due to lower wholesale propane product costs. UGI also noted that its International Propane division grew its sales to $40.2 million from $22.4 million last year.

Analyst Estimates

Analysts have been bullish on UGI's current-year earnings, with the current-year estimate increasing 20 cents in the last 90 days to $2.28 per share.

Valuations

Based upon this earnings projection, this stock carries a forward P/E multiple of 11.5X, a reasonable valuation for a company that is growing its earnings in this kind of challenging environment.

The Chart

Shares of UGI have been on a steady rally since bottoming out around $18.50 in early October. More recently, this stock surged above a key level of short-term resistance just above the $25 mark. Take a look below.