UGI Corp's Meteoric Rise: Unpacking the 22% Surge in Just 3 Months

UGI Corp (UGI, Financial) has experienced a significant uptick in its stock price, with a 9.42% gain over the past week and an impressive 22.26% gain over the past three months. Currently, the market capitalization stands at $5.26 billion, with the stock price at $25.1. Despite these gains, the GF Value suggests a valuation of $41.35, indicating that the stock might be a possible value trap, a sentiment that has remained unchanged from the past GF Value of $45.85. Investors are advised to think twice before making an investment decision based on these figures.

Understanding UGI Corp's Business Model

UGI Corp, a player in the regulated utilities industry, is a diversified energy company with a focus on the distribution and marketing of energy and related services. Its operations are spread across various segments, including AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. The company's primary revenue generator is the UGI International segment, which deals with LPG distribution. 1753421081148026880.png

Profitability Analysis of UGI Corp

UGI Corp's Profitability Rank is currently at 7/10, which is commendable within its industry. However, the company's operating margin is in negative territory at -4.96%, which is still better than 8.84% of 509 companies in the same domain. The ROE stands at a concerning -29.80%, yet it surpasses 2.94% of its peers. Similarly, the ROA and ROIC are negative at -9.18% and -2.35%, respectively, but still outperform a significant portion of the industry. UGI Corp has maintained profitability for 9 out of the past 10 years, which is a positive indicator for potential investors. 1753421098646663168.png

Growth Prospects of UGI Corp

The company's Growth Rank is low at 1/10, which could raise concerns about its future expansion. However, UGI Corp has shown a 10.80% 3-Year Revenue Growth Rate per Share, outperforming 61.86% of 485 companies in the industry. The 5-Year Revenue Growth Rate per Share is modest at 1.40%, and the 3-Year and 5-Year EPS without NRI Growth Rates are 2.10% and 2.90%, respectively. These figures suggest that while growth is not explosive, it is steady. 1753421116271128576.png

Major Stakeholders in UGI Corp

First Eagle Investment (Trades, Portfolio) is the leading holder with 6,637,725 shares, representing a 3.17% share percentage. Diamond Hill Capital (Trades, Portfolio) follows with 2,265,163 shares, holding 1.08% of the company. Steven Scruggs (Trades, Portfolio) also has a notable position with 619,097 shares, accounting for 0.3% of the shares. The commitment of these significant investors could be seen as a vote of confidence in UGI Corp's market position and future prospects.

Competitive Landscape

When compared to its competitors, UGI Corp holds a competitive market cap of $5.26 billion. Southwest Gas Holdings Inc (SWX, Financial) has a market cap of $4.29 billion, New Jersey Resources Corp (NJR, Financial) at $4.05 billion, and ONE Gas Inc (OGS, Financial) at $3.43 billion. UGI Corp's market cap suggests that it is a leading player within its industry, potentially offering a more stable investment opportunity.

Final Thoughts on UGI Corp's Market Position

In conclusion, UGI Corp's recent stock performance has been remarkable, with a 22.26% gain over the past three months. However, the current GF Valuation advises caution, labeling the stock as a possible value trap. The company's profitability metrics, although negative, are relatively better than many of its peers, and it has a consistent track record of profitability. Growth rates are not exceptional but indicate a stable trajectory. The positions held by major investors and the company's market cap in comparison to its competitors suggest that UGI Corp holds a strong market position. Investors should weigh these factors carefully when considering UGI Corp as a potential addition to their portfolios.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.


I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.