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1. Company Snapshot

1.a. Company Description

Superior Plus Corp.engages in the energy distribution business.It operates through two segments, U.S. Propane Distribution and Canadian Propane Distribution.


The U.S. Propane Distribution segment distributes and sells propane, heating oil, and other liquid fuels in the Northeast, Atlantic, the Southeast, the Midwest, and California.It also provides installation, maintenance, and repair services for propane and heating oil equipment.The Canadian Propane Distribution segment distributes and sells propane, and propane-consuming equipment; rents tanks, cylinders, and other equipment; and provides equipment supply, installation, and repair services.


This segment offers its service in Canada and the United States.Superior General Partner Inc.serves as the general partner of the company.


As of February 10, 2022, the company served approximately 780,000 customers The company was founded in 1996 and is headquartered in Toronto, Canada.

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1.b. Last Insights on SPB

Superior Plus Corp.'s recent performance was driven by a record Adjusted EBITDA in Q1 2025, exceeding expectations. The company's strong financial results were accompanied by a declared quarterly dividend of CAD $0.045 per common share, demonstrating its commitment to returning value to shareholders. Additionally, the company's Board of Directors approved a quarterly dividend, indicating a stable financial position.

1.c. Company Highlights

2. Superior Plus' Q3 Earnings: A Mixed Bag

Superior Plus reported adjusted EBITDA of $7.6 million in Q3, a decline of $9.8 million from Q3 2024, primarily due to lower US propane volumes and CNG pricing pressure. The company's EPS came in at -$0.57103, missing estimates of $0.189. Despite the quarterly miss, year-to-date adjusted EBITDA per share increased 15% to $0.91, driven by higher adjusted EBITDA, lower interest costs, and a 7% decline in diluted weighted average shares outstanding.

Publication Date: Nov -23

📋 Highlights
  • Superior Delivers Transformation: Aims for $75M run-rate savings by 2027, with $20M in Q3 restructuring costs and $10M–$15M one-time costs in 2025.
  • Q3 Adjusted EBITDA Decline: Fell to $7.6M (from $17.4M in Q3 2024) due to lower US propane volumes and CNG pricing pressure.
  • EBITDA per Share Growth: Year-to-date adjusted EBITDA per share rose 15% to $0.91, driven by share buybacks and cost reductions.
  • Certarus Performance: Q3 EBITDA dropped to $25.7M (-$4.6M) due to pricing pressure but maintained >25% margins and 5% lower operating costs per MMBtu.
  • Share Repurchase Strategy: Repurchased 1% of shares in Q3 (1.8M shares) and plans CAD $135M/year in buybacks, targeting 3.0x leverage by 2027.

Segment Performance

The propane business' adjusted EBITDA increased 3% to $213.8 million in the first three quarters, with Canadian propane generating $64.2 million in adjusted EBITDA, up 4%, primarily due to higher sales volumes from colder weather in Q1. However, Q3 adjusted EBITDA in US propane declined $6.1 million due to lower retail sales volumes. Certarus, the CNG business, saw adjusted EBITDA decline $4.6 million to $25.7 million in Q3, mainly due to well site pricing pressure.

Guidance Revision and Outlook

The company revised its 2025 expected adjusted EBITDA growth target from 8% to 2%, primarily due to lower well site pricing in CNG and one-time costs associated with new delivery tools. Despite the revision, the company expects 2025 EBITDA per share to grow by 15%, driven by reduced share count, lower interest costs, and growth in adjusted EBITDA. Free cash flow per share is expected to grow by approximately 70% compared to 2024.

Valuation and Leverage

With a P/E Ratio of 21.11 and EV/EBITDA of 6.07, the stock appears to be fairly valued. However, the company's Net Debt / EBITDA ratio of 3.72x indicates a relatively high leverage, which the company aims to reduce to 3.0x by the end of 2027. The company's commitment to share repurchases and debt reduction is evident in its recent actions, having repurchased over 10% of its equity.

Transformation Progress

As Allan MacDonald, President and CEO, expressed pride in the company's progress, two quarters into its "Superior Delivers" transformation plan, the company has made significant changes, including a new distribution model using AI-driven algorithms, centralized functions, and reduced headcount. The company remains confident in delivering value and achieving its 2027 free cash flow target of $1-1.10 USD, despite some setbacks.

3. NewsRoom

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Assessing Superior Plus (TSX:SPB) Valuation Following Recent 20% Share Price Decline

Nov -16

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Superior Plus Secures TSX Approval for Share Buyback; Shares Slumped 21% Today

Nov -14

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Superior Receives TSX Approval for Normal Course Issuer Bid

Nov -14

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Superior Plus Corp (SUUIF) Q3 2025 Earnings Call Highlights: Navigating Challenges with ...

Nov -14

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Superior Plus Declares 2025 Fourth Quarter Dividend

Nov -13

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Superior Announces Q3 and Nine Month 2025 Results

Nov -13

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Superior Plus Announces Timing of 2025 Third Quarter Results Conference Call and Webcast

Oct -01

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Agereh Technologies Announces Board Appointment

Sep -17

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.36%)

6. Segments

United States Propane

Expected Growth: 7%

The 7% growth of United States Propane from Superior Plus Corp is driven by increasing demand for clean energy, government incentives for propane adoption, and rising exports. Additionally, the company's strategic acquisitions and investments in infrastructure expansion have improved operational efficiency, further boosting growth.

Canada Propane

Expected Growth: 9%

Canada Propane from Superior Plus Corp. growth driven by increasing demand for clean energy, government incentives for propane adoption, and strategic acquisitions expanding market share. Additionally, rising exports to Asia and the US, coupled with a strong logistics network, contribute to the 9% growth rate.

Wholesale Propane

Expected Growth: 6%

Superior Plus Corp's Wholesale Propane segment growth is driven by increasing demand from industrial and commercial customers, expansion into new markets, and strategic acquisitions. Additionally, favorable weather conditions, government incentives for clean energy, and rising prices of alternative fuels contribute to the 6% growth rate.

Certarus

Expected Growth: 8%

Certarus' 8% growth is driven by increasing demand for clean energy solutions, expansion into new markets, and strategic partnerships. Additionally, Superior Plus Corp.'s strong operational efficiency and cost management enable Certarus to capitalize on growing opportunities in the compressed natural gas (CNG) and liquefied natural gas (LNG) markets.

7. Detailed Products

Propane

A clean-burning, environmentally friendly fuel used for heating, cooking, and powering vehicles.

Liquefied Petroleum Gas (LPG)

A portable, versatile fuel used for heating, cooking, and powering appliances.

Fuel Oil

A refined product used for heating homes and businesses.

Diesel Fuel

A refined product used for powering vehicles and equipment.

Heating Oil

A refined product used for heating homes and businesses.

Lubricants

A range of lubricating oils and greases used for various industrial and commercial applications.

Chemicals

A range of chemicals used in various industrial and commercial applications.

Transportation Services

A range of transportation services for fuels and chemicals.

8. Superior Plus Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Superior Plus Corp. is medium due to the availability of alternative energy sources and the increasing adoption of renewable energy.

Bargaining Power Of Customers

The bargaining power of customers for Superior Plus Corp. is low due to the company's diversified customer base and the lack of concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Superior Plus Corp. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Superior Plus Corp. is low due to the high barriers to entry in the energy industry and the company's established market position.

Intensity Of Rivalry

The intensity of rivalry for Superior Plus Corp. is high due to the competitive nature of the energy industry and the presence of multiple players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.50%
Debt Cost 7.25%
Equity Weight 36.50%
Equity Cost 7.97%
WACC 7.51%
Leverage 173.97%

11. Quality Control: Superior Plus Corp. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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AltaGas

A-Score: 6.7/10

Value: 4.7

Growth: 6.1

Quality: 3.6

Yield: 7.0

Momentum: 8.5

Volatility: 10.0

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Northwest Natural

A-Score: 6.5/10

Value: 6.5

Growth: 3.2

Quality: 4.0

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

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Suburban Propane

A-Score: 6.2/10

Value: 6.4

Growth: 2.4

Quality: 5.1

Yield: 10.0

Momentum: 4.5

Volatility: 8.7

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RGC Resources

A-Score: 5.6/10

Value: 4.7

Growth: 3.6

Quality: 4.9

Yield: 8.0

Momentum: 6.5

Volatility: 6.0

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Superior Plus

A-Score: 5.6/10

Value: 7.0

Growth: 1.4

Quality: 4.1

Yield: 6.0

Momentum: 6.5

Volatility: 8.3

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OPAL Fuels

A-Score: 4.5/10

Value: 9.7

Growth: 8.6

Quality: 5.1

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.1$

Current Price

7.1$

Potential

-0.00%

Expected Cash-Flows