Critical Review: UGI (UGI) vs. Its Competitors

UGI (NYSE:UGI) is one of 17 public companies in the “UTIL – GAS DISTR” industry, but how does it compare to its peers? We will compare UGI to similar businesses based on the strength of its valuation, institutional ownership, risk, profitability, analyst recommendations, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for UGI and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UGI	0	1	4	0	2.80
UGI Competitors	430	1123	804	35	2.19

UGI currently has a consensus price target of $44.50, suggesting a potential upside of 21.53%. As a group, “UTIL – GAS DISTR” companies have a potential upside of 2.04%. Given UGI’s stronger consensus rating and higher probable upside, equities analysts clearly believe UGI is more favorable than its peers.

Dividends

UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.1%. UGI pays out 55.4% of its earnings in the form of a dividend. As a group, “UTIL – GAS DISTR” companies pay a dividend yield of 2.9% and pay out 57.2% of their earnings in the form of a dividend. UGI has raised its dividend for 37 consecutive years. UGI is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Volatility and Risk

UGI has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, UGI’s peers have a beta of 0.69, indicating that their average share price is 31% less volatile than the S&P 500.

Institutional and Insider Ownership

82.3% of UGI shares are held by institutional investors. Comparatively, 74.1% of shares of all “UTIL – GAS DISTR” companies are held by institutional investors. 0.6% of UGI shares are held by insiders. Comparatively, 8.4% of shares of all “UTIL – GAS DISTR” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares UGI and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UGI	8.17%	14.46%	4.57%
UGI Competitors	7.33%	5.38%	1.30%

Valuation and Earnings

This table compares UGI and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
UGI	$7.29 billion	$678.00 million	13.51
UGI Competitors	$10.78 billion	$445.34 million	18.28

UGI’s peers have higher revenue, but lower earnings than UGI. UGI is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

UGI beats its peers on 11 of the 15 factors compared.

About UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.