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Here's Why You Should Add UGI to Your Portfolio Right Now
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UGI Corporation (UGI - Free Report) continues to benefit from capital investments that aid in system upgradation with the replacement of aging infrastructure. Given its growth opportunities and strong return on equity (ROE), UGI makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a robust investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has moved up 2.5% in the past 90 days to $2.91.
The company delivered an average earnings surprise of 19.1% in the last four quarters.
Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.78%, higher than the industry’s average of 9.7%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility gas distribution industry.
Debt Position
Currently, UGI’s total debt to capital is 59.57%, better than the sector’s average of 60.59%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2024 was 1.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The consistent performance of the company enabled it to reward its shareholders through annual dividend rate hikes. The company has been paying dividends for the last 140 years. Currently, its quarterly dividend is 37.5 cents per share, resulting in an annualized dividend of $1.50. The company’s current dividend yield of 6.08% is better than the industry’s average of 3.38%.
Systematic Investments
UGI continues to make systematic capital investments to address the infrastructural need for various capital projects and for increasing the safety and reliability of natural gas production and storage facilities, plus replacing the aging infrastructure for modernizing the system. The company expects capital expenditure in the range of $3.7-$4.1 billion during the fiscal 2024-2027 period. Nearly 85% of total capital investment is targeted toward natural gas businesses.
Price Performance
In the past six months, the stock has risen 12.7% compared with the industry’s 8.1% growth.
ATO’s long-term (three to five years) earnings growth rate is 7%. The company delivered an average earnings surprise of 0.4% in the last four quarters.
MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS indicates year-over-year growth of 3.3%.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS implies a year-over-year rise of 16.8%.
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Here's Why You Should Add UGI to Your Portfolio Right Now
UGI Corporation (UGI - Free Report) continues to benefit from capital investments that aid in system upgradation with the replacement of aging infrastructure. Given its growth opportunities and strong return on equity (ROE), UGI makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a robust investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has moved up 2.5% in the past 90 days to $2.91.
The company delivered an average earnings surprise of 19.1% in the last four quarters.
Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.78%, higher than the industry’s average of 9.7%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility gas distribution industry.
Debt Position
Currently, UGI’s total debt to capital is 59.57%, better than the sector’s average of 60.59%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2024 was 1.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The consistent performance of the company enabled it to reward its shareholders through annual dividend rate hikes. The company has been paying dividends for the last 140 years. Currently, its quarterly dividend is 37.5 cents per share, resulting in an annualized dividend of $1.50. The company’s current dividend yield of 6.08% is better than the industry’s average of 3.38%.
Systematic Investments
UGI continues to make systematic capital investments to address the infrastructural need for various capital projects and for increasing the safety and reliability of natural gas production and storage facilities, plus replacing the aging infrastructure for modernizing the system. The company expects capital expenditure in the range of $3.7-$4.1 billion during the fiscal 2024-2027 period. Nearly 85% of total capital investment is targeted toward natural gas businesses.
Price Performance
In the past six months, the stock has risen 12.7% compared with the industry’s 8.1% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are Atmos Energy (ATO - Free Report) , MDU Resources (MDU - Free Report) and DTE Energy (DTE - Free Report) , each holding a Zacks Rank #2 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%. The company delivered an average earnings surprise of 0.4% in the last four quarters.
MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS indicates year-over-year growth of 3.3%.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS implies a year-over-year rise of 16.8%.