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Star Gas Partners LP (SGU)
NYSE:SGU
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Star Gas Partners
(NYSE:SGU)
Rating:73Outperform
Price Target:
$13.00
▲(10.26%Upside)
Star Gas Partners (SGU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$407.53M
Dividend Yield6.28%
Average Volume (3M)33.48K
Price to Earnings (P/E)6.9
Beta (1Y)0.27
Revenue Growth2.38%
EPS Growth114.29%
CountryUS
Employees3,039
SectorEnergy
Sector Strength54
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)2.01
Shares Outstanding34,565,975
10 Day Avg. Volume29,157
30 Day Avg. Volume33,482
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)-19.48
Price to Sales (P/S)0.00
P/FCF Ratio19.99
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue0.08
Enterprise Value/Gross Profit1.08
Enterprise Value/Ebitda1.20
Forecast
1Y Price Target
$13.50Price Target Upside14.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Star Gas Partners Business Overview & Revenue Model
Company DescriptionStar Group, L.P. sells home heating and air conditioning products and services to residential and commercial home heating oil and propane customers in the United States. It also sells diesel fuel, gasoline, and home heating oil on a delivery only basis, as well as provide plumbing services; and installs maintains, and repairs heating and air conditioning equipment. As of September 30, 2021, the company served approximately 422,200 full service residential and commercial home heating oil and propane customers and 71,100 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,700 customers. Kestrel Heat, LLC operates as the general partner of the company. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.
How the Company Makes MoneyStar Gas Partners generates revenue through the sale and distribution of home heating oil and propane to both residential and commercial customers. The company earns money by charging customers for fuel deliveries and offering various payment plans, including fixed-price and price-protection plans, to manage costs effectively. Additionally, Star Gas Partners earns income from its HVAC services, which include equipment sales, installation, and maintenance contracts. The company benefits from strategic partnerships with suppliers and service providers to ensure a steady supply of fuel and optimize operational efficiencies. Seasonal demand, particularly during winter months, significantly influences revenue, with higher sales typically occurring during colder periods.
Star Gas Partners Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q2-2025)
| % Change Since: -6.58%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in heating oil and propane volumes, successful acquisitions, and improved profitability, alongside challenges such as increased expenses from the weather hedging program and operating costs. The overall sentiment is positive due to the significant achievements outweighing the challenges.Q2-2025 Updates
Positive Updates
Significant Increase in Heating Oil and Propane Volume
Home heating oil and propane volume increased by 23% to 144 million gallons in Q2, contributing to a $32 million improvement in adjusted EBITDA.
Successful Acquisition Strategy
Completed $126.5 million in acquisitions since February 1, 2024, enhancing market presence and contributing to increased volume and profitability.
Increased Dividend for Shareholders
Annual dividend was raised by $0.05 to $0.74 per unit, reflecting the company's commitment to maximizing returns for investors.
Improved Service and Installation Business
Service and installation business profitability increased, contributing an additional $1.6 million to adjusted EBITDA in Q2.
Overall Profitability and Growth
Net income for Q2 rose by $18 million to $86 million, driven by higher adjusted EBITDA and increased margins.
Negative Updates
Weather Hedging Program Expenses
Weather hedging program resulted in a $3.1 million expense in Q2, compared to a $6.5 million benefit in the prior year period.
Increased Operating Expenses
Delivery, branch, and G&A expenses increased by $22 million year-over-year, partly due to recent acquisitions and increased base business volume.
Challenges in Consumer Payment Timeliness
Potential concerns about consumer ability to pay for heating oil in the non-heating season due to historical bad debt rates.
Company Guidance
In the Star Group's fiscal 2025 second quarter results conference call, the company provided detailed metrics reflecting significant growth and strategic investments. Home heating oil and propane volumes increased by 23% to 144 million gallons, driven by colder weather and recent acquisitions totaling $126.5 million since February 2024. This resulted in a $32 million improvement in adjusted EBITDA compared to the previous year, reaching $128 million for the quarter. The product gross profit rose by 25% to $258 million, bolstered by higher margins and increased sales volume. Net income for the quarter was $86 million, $18 million higher than the same period last year. Additionally, Star Group raised its annual dividend by $0.05 to $0.74 per unit, reflecting its commitment to maximizing shareholder returns. The company's focus on operational efficiency and expansion in the HVAC sector was emphasized, alongside the implementation of $15 million in weather hedges for fiscal 2026.Star Gas Partners Financial Statement Overview
Summary
Star Gas Partners demonstrates a solid financial position with improved profitability and operational efficiency. Revenue growth remains modest at 2.1%, but the company has strengthened its balance sheet with a debt-to-equity ratio of 0.85 and improved ROE of 15.8%. Cash flow generation is robust, though the decline in free cash flow growth is a concern. Overall, financial health has improved significantly.Income Statement
Star Gas Partners shows a stable gross profit margin of 29.5% TTM, improving from previous margins due to better cost management. The net profit margin increased to 3.3% TTM, up from 1.8% last year, indicating enhanced profitability. Revenue growth was modest at 2.1% TTM compared to the previous period, showing slow but steady expansion. EBIT and EBITDA margins of 6.3% and 8.1% respectively suggest operational efficiency gains. Overall, the income statement reflects improving profitability but moderate revenue growth.72
Positive
Balance Sheet
Star Gas Partners maintains a debt-to-equity ratio of 0.85, indicating moderate leverage. Return on Equity (ROE) improved significantly to 15.8% TTM, reflecting better utilization of equity. The equity ratio is at 35.5%, showing a strong equity position relative to assets. Despite improvements, the company had negative equity in past years, indicating historical financial struggles. The current balance sheet reflects improved stability and financial health.65
Positive
Cash Flow
The company achieved a free cash flow growth rate of -11.2% TTM, reflecting a decline from previous levels. Operating cash flow to net income ratio is robust at 1.69, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.50, demonstrating effective conversion of profits into cash. While cash generation remains strong, the decline in free cash flow growth warrants attention.74
Positive
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.80B | 1.77B | 1.95B | 2.01B | 1.50B | 1.47B |
| Gross Profit | 531.54M | 470.33M | 438.40M | 451.63M | 444.17M | 440.40M |
| EBITDA | 145.92M | 92.60M | 94.89M | 93.05M | 163.69M | 120.87M |
| Net Income | 59.41M | 32.10M | 29.34M | 35.29M | 87.74M | 55.92M |
Balance Sheet | ||||||
| Total Assets | 1.06B | 939.61M | 875.48M | 912.48M | 853.86M | 838.62M |
| Cash, Cash Equivalents and Short-Term Investments | 18.50M | 117.33M | 45.19M | 14.62M | 4.77M | 56.91M |
| Total Debt | 317.66M | 304.56M | 243.75M | 282.96M | 219.09M | 227.85M |
| Total Liabilities | 688.88M | 675.72M | 611.75M | 654.56M | 575.66M | 582.80M |
| Stockholders Equity | 375.92M | 269.61M | 268.34M | -15.61M | -14.04M | -14.96M |
Cash Flow | ||||||
| Free Cash Flow | 89.04M | 100.33M | 114.65M | 15.21M | 53.79M | 161.54M |
| Operating Cash Flow | 100.20M | 110.98M | 123.66M | 33.91M | 68.88M | 175.67M |
| Investing Cash Flow | -118.38M | -61.19M | -28.20M | -32.63M | -50.33M | -28.14M |
| Financing Cash Flow | 24.62M | 22.35M | -64.89M | 8.57M | -70.69M | -95.52M |
Star Gas Partners Technical Analysis
Positive
11.79
Price Trends
12.01
Negative
12.41
Negative
11.93
Negative
Market Momentum
-0.06
Negative
48.52
Neutral
75.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGU, the sentiment is Positive. The current price of 11.79 is above the 20-day moving average (MA) of 11.74, below the 50-day MA of 12.01, and below the 200-day MA of 11.93, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 48.52 is Neutral, neither overbought nor oversold. The STOCH value of 75.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SGU.
Star Gas Partners Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $407.53M | 6.90 | 16.51% | 6.28% | 2.38% | 114.29% | |
71 Outperform | $8.18B | 9.62 | 26.11% | 6.71% | -3.59% | 22.77% | |
66 Neutral | $1.81B | 3.02 | -4.95% | ― | -9.25% | -113.66% | |
60 Neutral | $483.95M | ― | -30.25% | ― | 6.50% | -151.25% | |
55 Neutral | $3.24B | 268.82 | -27.14% | 14.02% | -16.21% | -130.18% | |
54 Neutral | $789.00M | 26.12 | 666.62% | 10.14% | -6.57% | -50.55% | |
52 Neutral | C$2.94B | -1.04 | -3.46% | 5.85% | 3.01% | -47.13% |
* Energy Sector Average
Performance Comparison
SGU
Star Gas Partners
11.79
1.34
12.82%
CLNE
Clean Energy Fuels
2.19
-0.47
-17.67%
CVI
CVR Energy
32.23
7.90
32.47%
SUN
Sunoco
53.53
-0.69
-1.27%
CAPL
Crossamerica Partners
20.71
2.81
15.70%
PARR
Par Pacific Holdings
35.06
11.16
46.69%
Star Gas Partners Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Star Gas Partners Finalizes Unit Purchase Agreement
Neutral
Jun 2, 2025
On May 30, 2025, Star Group, L.P. entered into a Unit Purchase Agreement with Bandera Master Fund, L.P. to acquire 0.7 million common units for approximately $8.4 million in a private transaction, which was finalized on June 2, 2025. This acquisition was conducted outside of Star Group’s unit repurchase plan, indicating a strategic move to consolidate ownership, potentially impacting its market position and stakeholder interests.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.