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Here's Why You Should Add UGI to Your Portfolio Right Now
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UGI Corporation’s (UGI - Free Report) strategic investment plans that help to upgrade and replace the aging infrastructure boost its 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
The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has moved up 0.34% in the past 90 days to $2.92.
The Zacks Consensus Estimate for fiscal 2025 EPS has moved up 0.32% in the past 90 days to $3.11.
The company delivered a trailing four-quarter average earnings surprise of 99.1%.
Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.65%, higher than the industry’s average of 9.33%. 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 59.61%, better than the sector’s average of 59.66%.
The time-to-interest earned ratio at the end of the fiscal third quarter of 2024 was 3.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The consistent strong performance of the company has 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 6.21% is better than the industry’s average of 3.3%.
Strategic Investments
UGI continues to make systematic capital investments to address the various capital projects and further enhance the safety and reliability of natural gas production and storage facilities, along with replacing the aging infrastructure for modernizing the system. These additions and upgrades allow it to serve the expanding customer base efficiently. It expects capital expenditure to be in the range of $3.7-$4.1 billion for fiscal 2024-2027. The company recovers nearly 90% of its capital investments within 12 months, owing to timely rate revisions and approvals.
Price Performance
In the past month, shares of the company have risen 0.2% against the industry’s 0.1% decline.
The Zacks Consensus Estimate for NFG’s fiscal 2024 EPS indicates a year-over-year decline of 0.8%. The company delivered an average earnings surprise of 9.8% in the last four quarters.
ATO’s long-term (three to five years) earnings growth rate is 7%. The Zacks Consensus Estimate for ATO’s fiscal 2024 EPS indicates a year-over-year increase of 11.3%.
The Zacks Consensus Estimate for NJR’s fiscal 2024 EPS implies year-over-year growth of 10.1%. The Zacks Consensus Estimate for fiscal 2024 sales indicates a decline of 7.7% from the top line reported in fiscal 2023.
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Here's Why You Should Add UGI to Your Portfolio Right Now
UGI Corporation’s (UGI - Free Report) strategic investment plans that help to upgrade and replace the aging infrastructure boost its 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
The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has moved up 0.34% in the past 90 days to $2.92.
The Zacks Consensus Estimate for fiscal 2025 EPS has moved up 0.32% in the past 90 days to $3.11.
The company delivered a trailing four-quarter average earnings surprise of 99.1%.
Return on Equity
ROE indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, UGI’s ROE is 15.65%, higher than the industry’s average of 9.33%. 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 59.61%, better than the sector’s average of 59.66%.
The time-to-interest earned ratio at the end of the fiscal third quarter of 2024 was 3.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The consistent strong performance of the company has 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 6.21% is better than the industry’s average of 3.3%.
Strategic Investments
UGI continues to make systematic capital investments to address the various capital projects and further enhance the safety and reliability of natural gas production and storage facilities, along with replacing the aging infrastructure for modernizing the system. These additions and upgrades allow it to serve the expanding customer base efficiently. It expects capital expenditure to be in the range of $3.7-$4.1 billion for fiscal 2024-2027. The company recovers nearly 90% of its capital investments within 12 months, owing to timely rate revisions and approvals.
Price Performance
In the past month, shares of the company have risen 0.2% against the industry’s 0.1% decline.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are National Fuel Gas Company (NFG - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Atmos Energy (ATO - Free Report) and New Jersey Resources (NJR - Free Report) , both holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NFG’s fiscal 2024 EPS indicates a year-over-year decline of 0.8%. The company delivered an average earnings surprise of 9.8% in the last four quarters.
ATO’s long-term (three to five years) earnings growth rate is 7%. The Zacks Consensus Estimate for ATO’s fiscal 2024 EPS indicates a year-over-year increase of 11.3%.
The Zacks Consensus Estimate for NJR’s fiscal 2024 EPS implies year-over-year growth of 10.1%. The Zacks Consensus Estimate for fiscal 2024 sales indicates a decline of 7.7% from the top line reported in fiscal 2023.