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Here's Why You Should Include UGI Stock in Your Portfolio Right Away

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Key Takeaways

  • UGI plans $800-$900M in fiscal 2025 and up to $4.1B by 2027 to modernize infrastructure.
  • Fiscal 2025 EPS estimate rose 3.3% to $3.13, with sales expected to grow 8.4% to $7.81B.
  • UGI's 16.21% ROE and 141-year dividend track record underscore consistent performance.

UGI Corporation’s (UGI - Free Report) planned investments should help upgrade and replace its aging infrastructure and boost its overall performance. 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 strong investment pick at the moment.

Growth Projections & Surprise History of UGI

The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has moved up 3.3% in the past 60 days to $3.13. 

The Zacks Consensus Estimate for fiscal 2025 sales is pinned at $7.81 billion, indicating a year-over-year increase of 8.4%.  

UGI’s long-term (three to five years) earnings growth rate is 5.2%. The company delivered a trailing four-quarter average earnings surprise of 75.7%.

UGI’s Liquidity

The company’s current ratio of 1.23 is better than the industry’s average of 0.63. A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary.

UGI’s ROE Better Than Industry

ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 16.21%, higher than the industry’s average of 9.24%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility gas distribution industry.

UGI’s Debt Position

Currently, UGI’s total debt to capital is 58.34%, better than the sector’s average of 59.23%. 

The time-to-interest earned ratio at the end of the fiscal second quarter of 2025 was 2.5. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

UGI’s Dividend History

The consistently strong performance of the company has enabled it to reward its shareholders through annual dividend rate hikes. UGI has been paying dividends for the past 141 years. Currently, its quarterly dividend is 37.5 cents per share, resulting in an annualized dividend of $1.50. The CAGR for UGI’s 10-year dividend is 6% for fiscal 2014-2024. The company’s current dividend yield of 4.1% is better than the industry’s average of 3.28%.

UGI’s Benefits From Strategic Investments

UGI continues to make systematic capital investments to address various capital projects, increase the safety and reliability of natural gas production and storage facilities, and replace aging infrastructure to modernize the system. These additions and upgrades allow it to serve the expanding customer base efficiently. The company has added more than 6,600 residential heating and commercial customers to the Utilities year to date.

UGI plans to invest $800-$900 million in fiscal 2025 to strengthen its operations, and $3.7-$4.1 billion through fiscal 2027. These investments will assist it in achieving the long-term annual EPS growth target of 4-6%

UGI’s Share Price Performance

In the past month, shares of the company have risen 6% compared with the industry’s 1.9% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks from the same industry are Southwest Gas (SWX - Free Report) , MDU Resources Group (MDU - Free Report) and New Jersey Resources (NJR - 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.

SWX’s long-term earnings growth rate is 9.87%. The Zacks Consensus Estimate for 2025 EPS indicates a year-over-year increase of 17.7%.

MDU’s long-term earnings growth rate is 6.46%. The Zacks Consensus Estimate for 2025 EPS indicates year-over-year growth of 5.6%. 

The Zacks Consensus Estimate for NJR’s fiscal 2025 EPS implies year-over-year growth of 9.9%. The consensus mark for fiscal 2025 sales indicates an increase of 8.96% from the top line reported in fiscal 2024. 

 

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