Head-To-Head Review: Suburban Propane Partners (NYSE:SPH) versus UGI (NYSE:UGI)

Suburban Propane Partners (NYSE:SPH) and UGI (NYSE:UGI) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares Suburban Propane Partners and UGI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Suburban Propane Partners	9.37%	18.57%	5.25%
UGI	9.20%	12.80%	4.15%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Suburban Propane Partners and UGI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suburban Propane Partners	0	1	0	2	3.33
UGI	1	1	4	0	2.50

UGI has a consensus price target of $42.00, suggesting a potential upside of 20.24%. Given UGI’s higher possible upside, analysts clearly believe UGI is more favorable than Suburban Propane Partners.

Institutional & Insider Ownership

30.9% of Suburban Propane Partners shares are owned by institutional investors. Comparatively, 82.3% of UGI shares are owned by institutional investors. 2.1% of Suburban Propane Partners shares are owned by insiders. Comparatively, 0.6% of UGI shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Suburban Propane Partners pays an annual dividend of $1.30 per share and has a dividend yield of 7.4%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.3%. Suburban Propane Partners pays out 66.3% of its earnings in the form of a dividend. UGI pays out 50.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UGI has raised its dividend for 37 consecutive years.

Earnings and Valuation

This table compares Suburban Propane Partners and UGI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suburban Propane Partners	$1.43 billion	0.82	$106.57 million	$1.96	9.01
UGI	$7.29 billion	1.03	$678.00 million	$2.99	11.68

UGI has higher revenue and earnings than Suburban Propane Partners. Suburban Propane Partners is trading at a lower price-to-earnings ratio than UGI, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Suburban Propane Partners has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, UGI has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Summary

UGI beats Suburban Propane Partners on 11 of the 18 factors compared between the two stocks.

About Suburban Propane Partners

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, renewable propane, fuel oil, and refined fuels in the United States. The company operates through four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. The Propane segment is involved in the retail distribution of propane for space heating, water heating, cooking, and clothes drying for use as a motor fuel in internal combustion engines to power over-the-road vehicles, forklifts, and stationary engines, as well as to fire furnaces as a cutting gas to the industrial customers; and for tobacco curing, crop drying, poultry brooding, and weed control in the agricultural markets. It also engages in the wholesale distribution of propane to industrial end users. Its Fuel Oil and Refined Fuels segment engages in the retail distribution of fuel oil, diesel, kerosene, and gasoline to residential and commercial customers for use in primarily as a source of heat in homes and buildings. The Natural Gas and Electricity segment markets natural gas and electricity to residential and commercial customers in the deregulated energy markets in New York and Pennsylvania. The All Other segment sells, installs, and services a range of home comfort equipment, including whole-house heating products, air cleaners, humidifiers, and space heaters. The company serves residential, commercial, industrial, and agricultural customers primarily in the east and west coast regions of the United States, as well as portions of the Midwest region of the United States and Alaska. Suburban Propane Partners, L.P. was founded in 1945 and is based in Whippany, New Jersey.

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.