We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Initiates Star Group Coverage With Neutral Recommendation
Read MoreHide Full Article
Zacks Investment Research has recently initiated coverage of Star Group, L.P. (SGU - Free Report) , assigning a "Neutral" recommendation. This designation reflects our balanced view of the company's prospects, given its robust dividend growth, stable financial performance and strategic market expansion, alongside prevailing industry challenges and market competition.
Star Group, headquartered in Stamford, CT, is the leading distributor and service provider of home heating oil and propane, primarily in the Northeast and Mid-Atlantic regions of the United States. The company, which is the largest retail distributor of home heating oil in the United States by sales volume, also markets propane, gasoline and diesel fuel through its wholly-owned subsidiary, Petro Holdings, Inc.
Financially, Star Group has shown resilience, increasing its quarterly distribution and recording a year-over-year rise in net income to $68.4 million in the second quarter of fiscal 2024. This growth partly resulted from its strategic acquisitions, such as the recent expansion on Long Island, which strengthen its market presence and diversification into related services like heating and air conditioning.
Despite year-over-year declines in revenues and volumes sold due to warmer weather and market fluctuations, Star Group showcased resilience by posting a net income rise to $68.4 million in the second quarter of fiscal 2024. This financial stability is attributed to favorable changes in derivative instruments and a reduction in interest expenses, underscoring the company's effective cost-management strategies.
However, SGU faces significant risks from declining natural gas prices and the rising popularity of alternative energy sources, which could erode its traditional customer base. Additionally, a 13.8% drop in revenues for the six months ending Mar 31, 2024, underscores the challenges posed by reduced sales volume and benefits from weather hedges.
From a financial management perspective, Star Group maintains a robust framework, with $12 million in cash and cash equivalents, and controlled use of its credit facilities, reflecting strong liquidity and reduced debt exposure. This proactive financial management helps the company navigate market volatility effectively.
In terms of valuation, SGU’s stock has had a mixed performance over the past year. Currently trading at low valuation multiples relative to industry standards, the stock presents a compelling entry point for investors, particularly when considering Star Group’s strategic initiatives and potential for profitability improvements.
For a comprehensive analysis of Star Group's financial health, strategic initiatives and market positioning, you are encouraged to view the full Zacks research report. This comprehensive report offers an in-depth analysis of SGU’s operational tactics, financial outcomes, and the challenges and opportunities that may affect its future trajectory.
Note: Our initiation of coverage on Star Group, which has a modest market capitalization of $351.3 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Initiates Star Group Coverage With Neutral Recommendation
Zacks Investment Research has recently initiated coverage of Star Group, L.P. (SGU - Free Report) , assigning a "Neutral" recommendation. This designation reflects our balanced view of the company's prospects, given its robust dividend growth, stable financial performance and strategic market expansion, alongside prevailing industry challenges and market competition.
Star Group, headquartered in Stamford, CT, is the leading distributor and service provider of home heating oil and propane, primarily in the Northeast and Mid-Atlantic regions of the United States. The company, which is the largest retail distributor of home heating oil in the United States by sales volume, also markets propane, gasoline and diesel fuel through its wholly-owned subsidiary, Petro Holdings, Inc.
Financially, Star Group has shown resilience, increasing its quarterly distribution and recording a year-over-year rise in net income to $68.4 million in the second quarter of fiscal 2024. This growth partly resulted from its strategic acquisitions, such as the recent expansion on Long Island, which strengthen its market presence and diversification into related services like heating and air conditioning.
Despite year-over-year declines in revenues and volumes sold due to warmer weather and market fluctuations, Star Group showcased resilience by posting a net income rise to $68.4 million in the second quarter of fiscal 2024. This financial stability is attributed to favorable changes in derivative instruments and a reduction in interest expenses, underscoring the company's effective cost-management strategies.
However, SGU faces significant risks from declining natural gas prices and the rising popularity of alternative energy sources, which could erode its traditional customer base. Additionally, a 13.8% drop in revenues for the six months ending Mar 31, 2024, underscores the challenges posed by reduced sales volume and benefits from weather hedges.
From a financial management perspective, Star Group maintains a robust framework, with $12 million in cash and cash equivalents, and controlled use of its credit facilities, reflecting strong liquidity and reduced debt exposure. This proactive financial management helps the company navigate market volatility effectively.
In terms of valuation, SGU’s stock has had a mixed performance over the past year. Currently trading at low valuation multiples relative to industry standards, the stock presents a compelling entry point for investors, particularly when considering Star Group’s strategic initiatives and potential for profitability improvements.
For a comprehensive analysis of Star Group's financial health, strategic initiatives and market positioning, you are encouraged to view the full Zacks research report. This comprehensive report offers an in-depth analysis of SGU’s operational tactics, financial outcomes, and the challenges and opportunities that may affect its future trajectory.
Read the full Research Report on Star Group here>>>
Note: Our initiation of coverage on Star Group, which has a modest market capitalization of $351.3 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.