We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Here's Why You Should Add UGI Stock to Your Portfolio Right Now
Read MoreHide Full Article
Key Takeaways
UGI's fiscal 2025 EPS estimate rose 1.3% to $3.13, with sales expected to grow 8.4% year over year.
UGI's 15.73% ROE surpasses the industry average, reflecting efficient capital use and solid performance.
UGI plans $800-$900 million in 2025 investments, supporting long-term EPS growth of 4-6% annually.
UGI Corporation (UGI - Free Report) continues to benefit from strategic investments in infrastructure modernization and disciplined capital allocation. The company benefits from its focus on operational improvements. 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 1.3% in the past 90 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 43.6%.
UGI’s ROE Better Than Its Industry
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.73%, higher than the industry’s average of 9.08%. 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 58.74%, better than the sector’s average of 60.9%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2025 was 2.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
UGI Benefits From Strategic Investments
UGI makes strategic investments to handle numerous capital projects, improve the safety and reliability of facilities used for natural gas production and storage, and update the system by replacing outdated infrastructure. These additions and upgrades enable it to serve the expanding customer base efficiently.
UGI invested $605 million in the year-to-date period to further strengthen its operations, with nearly 80% invested in the natural gas businesses. It 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 earnings per share growth target in the range of 4-6%.
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. The CAGR for UGI’s 10-year dividend is 6% for fiscal 2014-2024. The company’s current dividend yield of 4.71% is better than the Zacks S&P 500 composite’s 1.11%.
UGI’s Share Price Performance
In the past year, shares of the company have risen 26.7% compared with the industry’s 9.3% growth.
Image: Bigstock
Here's Why You Should Add UGI Stock to Your Portfolio Right Now
Key Takeaways
UGI Corporation (UGI - Free Report) continues to benefit from strategic investments in infrastructure modernization and disciplined capital allocation. The company benefits from its focus on operational improvements. 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 1.3% in the past 90 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 43.6%.
UGI’s ROE Better Than Its Industry
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.73%, higher than the industry’s average of 9.08%. 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 58.74%, better than the sector’s average of 60.9%.
The time-to-interest earned ratio at the end of the fiscal second quarter of 2025 was 2.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
UGI Benefits From Strategic Investments
UGI makes strategic investments to handle numerous capital projects, improve the safety and reliability of facilities used for natural gas production and storage, and update the system by replacing outdated infrastructure. These additions and upgrades enable it to serve the expanding customer base efficiently.
UGI invested $605 million in the year-to-date period to further strengthen its operations, with nearly 80% invested in the natural gas businesses. It 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 earnings per share growth target in the range of 4-6%.
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. The CAGR for UGI’s 10-year dividend is 6% for fiscal 2014-2024. The company’s current dividend yield of 4.71% is better than the Zacks S&P 500 composite’s 1.11%.
UGI’s Share Price Performance
In the past year, shares of the company have risen 26.7% compared with the industry’s 9.3% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Atmos Energy (ATO - Free Report) , ONE Gas (OGS - Free Report) and Spire (SR - Free Report) , each carrying 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 earnings growth rate is 7.32%. The Zacks Consensus Estimate for fiscal 2025 EPS indicates a year-over-year increase of 7.5%.
OGS’ long-term earnings growth rate is 5.56%. The Zacks Consensus Estimate for 2025 EPS indicates year-over-year growth of 11.3%.
SR’s long-term earnings growth rate is 6.81%. The Zacks Consensus Estimate for fiscal 2025 EPS implies year-over-year growth of 9.2%.