Suburban Propane (SPH) AI Stock Analysis

• Market Cap: $1.19B
• Dividend Yield: 7.11%
• Average Volume (3M): 179.53K
• Price to Earnings (P/E): 12.7
• Beta (1Y): 0.40
• Revenue Growth: 4.02%
• EPS Growth: -14.66%
• Country: US
• Employees: 3,098
• Sector: Utilities
• Sector Strength: 66
• Industry: Regulated Gas
• EPS (TTM): 2.10
• Shares Outstanding: 64,959,366
• 10 Day Avg. Volume: 226,417
• 30 Day Avg. Volume: 179,534
• PEG Ratio: 0.08
• Price to Book (P/B): -54.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.84
• Enterprise Value/Market Cap: 1.98
• Enterprise Value/Revenue: 0.43
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 2.58
• 1Y Price Target: $17.00
• Price Target Upside: -7.51% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: $19.50 ▲(6.09%Upside)

Suburban Propane's overall stock score reflects a stable financial position with strong cash flows and a reasonable valuation. Strong performance in the propane segment and strategic initiatives contribute positively. However, technical indicators show bearish signals, and challenges in the renewable segment and increased expenses weigh on the outlook.

Positive Factors

Acquisitions

The $53mn acquisition of a New Mexico and Arizona distributor is expected to improve gallons sold and EBITDA generation in FY25.

Index Rebalancing

SPH benefited significantly from the recent Alerian index rebalancing, showing a 20% increase compared to a 10% increase for the broader AMZ index.

Weather Impact

Colder temperatures are expected to improve results for the second quarter.

Negative Factors

Leverage

Leverage at the end of the first quarter was higher than management's target, driven by a propane acquisition and spending on RNG facilities.

Underperformance

Lower propane volumes were the key driver of underperformance due to an exceptionally warm and dry November.

Valuation Concerns

The company maintains an Underweight rating due to valuation concerns, elevated leverage, and ongoing capital requirements for RNG projects.

Suburban Propane Business Overview & Revenue Model

Company Description

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company operates in 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 to residential, commercial, industrial, and agricultural customers, as well as in the wholesale distribution to industrial end users. It offers propane primarily for space heating, water heating, cooking, and clothes drying in the residential and commercial markets; 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 in other process applications; and for tobacco curing, crop drying, poultry brooding, and weed control in the agricultural markets. The 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 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. As of September 25, 2021, the company served approximately 1.0 million residential, commercial, industrial, and agricultural customers through 700 locations in 41 states 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 Energy Services Group LLC serves as a general partner of Suburban Propane Partners, L.P. The company was founded in 1945 and is headquartered in Whippany, New Jersey.

How the Company Makes Money

Suburban Propane generates revenue primarily through the sale and delivery of propane, fuel oil, and other refined fuels to its diverse customer base. The company operates a vast network of distribution centers and a fleet of delivery vehicles, enabling it to efficiently meet customer demand across various regions. Key revenue streams include residential heating contracts, commercial fuel supply agreements, and industrial energy solutions. Additionally, Suburban Propane offers equipment rental and maintenance services, which provide supplementary income. The company's earnings are influenced by factors such as seasonal demand fluctuations, commodity price changes, and strategic partnerships with suppliers and service providers that enhance its distribution capabilities.

Suburban Propane Financial Statement Overview

Summary

Suburban Propane presents a stable financial position with strong operational cash flows and decent profitability margins. However, the company faces challenges with high leverage and a declining revenue trend. The focus on operational efficiency is a positive sign, but the company needs to address revenue growth to improve its financial outlook.

Income Statement

The income statement shows a mixed performance. The TTM gross profit margin is approximately 4.35%, which is relatively low. The TTM net profit margin is around 7.19%, indicating moderate profitability. Revenue has shown a declining trend over the years, but the company managed to improve its EBIT and EBITDA margins in the TTM period to 18.27% and 22.25%, respectively, suggesting a focus on cost control and operational efficiency.

Balance Sheet

The balance sheet reflects a challenging position with a high debt-to-equity ratio calculated at approximately 0.25, indicating significant leverage. The equity ratio stands at roughly 22.85%, reflecting a moderate level of equity financing. The return on equity (ROE) for the TTM is about 12.68%, indicating decent returns for shareholders despite the high leverage.

Cash Flow

Cash flow analysis reveals a solid performance with a strong operating cash flow to net income ratio of 2.63 for the TTM, indicating efficient cash generation from operations. The free cash flow to net income ratio is 1.59, highlighting effective capital expenditure management. However, free cash flow growth has been volatile, which could pose risks to future cash availability.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.15B	1.33B	1.43B	1.50B	1.29B	1.11B
Gross Profit	692.13M	328.12M	361.00M	789.34M	803.28M	724.95M
EBITDA	232.21M	216.47M	260.39M	259.64M	296.59M	252.13M
Net Income	28.35M	74.17M	123.75M	139.71M	122.79M	60.76M
Balance Sheet
Total Assets	2.45B	2.27B	2.27B	2.10B	2.05B	2.05B
Cash, Cash Equivalents and Short-Term Investments	56.46M	3.22M	3.51M	4.10M	5.81M	3.14M
Total Debt	1.24B	1.35B	1.33B	1.21B	1.25B	1.33B
Total Liabilities	1.59B	1.73B	1.72B	1.61B	1.63B	1.68B
Stockholders Equity	861.14M	547.06M	546.36M	-12.60M	-17.58M	-25.78M
Cash Flow
Free Cash Flow	123.57M	101.16M	180.29M	176.19M	196.70M	176.86M
Operating Cash Flow	151.69M	160.59M	225.24M	220.55M	226.55M	209.35M
Investing Cash Flow	-22.72M	-81.64M	-170.64M	-94.44M	-34.08M	-53.24M
Financing Cash Flow	-193.15M	-72.50M	-44.63M	-127.82M	-189.81M	-155.41M

Suburban Propane Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPH, the sentiment is Negative. The current price of 18.38 is below the 20-day moving average (MA) of 18.46, below the 50-day MA of 19.04, and below the 200-day MA of 18.84, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 45.57 is Neutral, neither overbought nor oversold. The STOCH value of 25.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPH.

Suburban Propane Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMPS	73 Outperform	$800.50M	23.35	0.29%	―	26.49%	―
NWN	72 Outperform	$1.66B	16.38	7.36%	4.81%	3.88%	11.80%
POR	71 Outperform	$4.51B	14.42	8.33%	5.16%	11.83%	9.53%
Sector *	67 Neutral	$16.52B	17.14	4.47%	3.56%	4.76%	6.13%
SPH	64 Neutral	$1.19B	12.69	14.42%	7.11%	4.02%	-14.66%
UTL	63 Neutral	$853.99M	17.91	9.07%	3.45%	-5.57%	-2.26%
YORW	58 Neutral	$462.54M	23.49	8.63%	2.73%	3.45%	-19.90%

Suburban Propane Corporate Events

Suburban Propane Announces Quarterly Distribution for Q2

On April 24, 2025, Suburban Propane Partners, L.P. announced a quarterly distribution of $0.325 per Common Unit for the fiscal second quarter ending March 29, 2025, equating to an annualized rate of $1.30 per Common Unit. The distribution, payable on May 13, 2025, to unitholders of record as of May 6, 2025, highlights the company’s ongoing financial commitments and has implications for foreign investors due to federal income tax withholding requirements.

Suburban Propane Announces Q2 Results Conference Call

On April 23, 2025, Suburban Propane Partners, L.P. announced it will hold its Fiscal 2025 Second Quarter Results Conference Call on May 8, 2025. This event will provide analysts, investors, and interested parties an opportunity to hear management discuss the company’s financial results and business outlook, potentially impacting stakeholders’ perspectives on Suburban Propane’s market positioning and future performance.