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1. Company Snapshot

1.a. Company Description

UGI Corporation 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 1.4 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,600 propane distribution location.


The company also 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 12,600 residential, commercial, and industrial customers at 42,400 locations.Further, the company distributes natural gas to approximately 672,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,400 miles of gas mains; and supplies electricity to approximately 62,500 customers in northeastern Pennsylvania through 2,600 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 also manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities.UGI Corporation was incorporated in 1991 and is based in King of Prussia, Pennsylvania.

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1.b. Last Insights on UGI

UGI Corporation's recent performance was driven by strong fiscal 2025 results, with GAAP net income of $678 million and adjusted net income of $728 million, surpassing prior year figures. A quarterly dividend of $0.375 per share was declared, showcasing the company's commitment to shareholders. The company's focus on renewable investments, such as the biofuel agreement with The City of Philadelphia, supports growth. Additionally, UGI's strategic asset sale in Austria for €55 million aims to create a more focused business. Its earnings outlook and ROE also reinforce its position as a utility pick.

1.c. Company Highlights

2. UGI Corporation Delivers Record Earnings and Raises Growth Expectations

UGI Corporation reported a strong fiscal year '25 with adjusted earnings per share (EPS) of $3.32, surpassing their revised guidance range of $3 to $3.15. The company's financial performance was driven by a 17% increase in EBIT in the AmeriGas segment, primarily due to operational improvements and income tax benefits. The actual EPS beat estimates by $0.21, as the reported EPS was $0.23 better than the estimated -$0.23 relative to -$0.44. The company's revenue growth is expected to continue, with analysts estimating a 17.7% revenue growth for the next year.

Publication Date: Nov -24

📋 Highlights
  • Record Adjusted EPS:: Achieved $3.32 fiscal 2025 adjusted EPS, exceeding revised guidance of $3–$3.15.
  • Free Cash Flow & Capital Investment:: Generated $530M free cash flow and invested $900M in capital, including $560M in gas distribution upgrades.
  • AmeriGas EBIT Growth:: Segment reported 17% EBIT increase, driven by operational improvements and tax benefits.
  • Long-Term EPS Guidance:: Raised 5–7% compound annual growth rate target and set fiscal 2026 adjusted EPS guidance at $2.85–$3.15.
  • Capital Deployment Plan:: Committed $4.5B–$4.9B in capital (2026–2029) for growth, including RNG projects and infrastructure upgrades.

Segment Performance and Growth Initiatives

The company's segments performed well, with UGI International advancing its portfolio optimization strategy and the natural gas businesses upgrading critical pipeline infrastructure and completing new LNG and renewable natural gas facilities. UGI Corporation raised its long-term EPS growth expectations, targeting a compound annual growth rate of 5% to 7%. The company plans to deploy $4.5 billion to $4.9 billion in capital from fiscal 2026 to 2029 to support strategic growth opportunities, with a focus on intrinsic value growth across its portfolio.

Capital Allocation and Dividend

The company generated approximately $530 million of free cash flow and returned value to shareholders through dividend payments. UGI Corporation invested around $900 million in capital, primarily in natural gas businesses, with $560 million spent on upgrading gas distribution infrastructure. The company's capital expenditure (CapEx) plan has increased by $200 million, which will be redirected towards shareholder returns. The utility CapEx is expected to be consistent or slightly up, while midstream capital will increase.

Valuation and Metrics

UGI Corporation's current valuation metrics indicate a P/E Ratio of 11.93, P/B Ratio of 1.66, and EV/EBITDA of 9.61. The company's Dividend Yield is 3.99%, and Free Cash Flow Yield is 5.48%. With an ROE of 14.42% and ROIC of 7.7%, the company demonstrates a strong ability to generate returns. The Net Debt / EBITDA ratio is 4.32, indicating a manageable debt level. These metrics suggest that the company is well-positioned to capitalize on opportunities in Pennsylvania and drive intrinsic value growth across its portfolio.

3. NewsRoom

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Top 2 Utilities Stocks That May Fall Off A Cliff This Quarter

Nov -24

Source: benzinga.com

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UGI Corporation (UGI) Q4 2025 Earnings Call Transcript

Nov -21

Source: seekingalpha.com

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UGI's Q4 Loss Narrower Than Expected, Revenues Fall Short of Estimates

Nov -21

Source: zacks.com

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UGI (UGI) Reports Q4 Loss, Misses Revenue Estimates

Nov -21

Source: zacks.com

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UGI Reports Strong Fiscal 2025 Results

Nov -20

Source: businesswire.com

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UGI Declares Common Dividend

Nov -20

Source: businesswire.com

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UGI Energy Services and The City of Philadelphia Announce Biofuel Agreement

Nov -12

Source: businesswire.com

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Cullen Frost Bankers Inc. Acquires Shares of 2,373 UGI Corporation $UGI

Oct -26

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.67%)

6. Segments

UGI International

Expected Growth: 3.5%

UGI International's 3.5% growth is driven by increasing demand for liquefied petroleum gas (LPG) in Europe, expansion into new markets, and strategic acquisitions. Additionally, the segment benefits from a strong cost management and operational efficiency, which enables it to maintain a competitive edge in the market.

AmeriGas Propane

Expected Growth: 3.2%

AmeriGas Propane's 3.2% growth is driven by increasing demand for propane as a clean energy source, strategic acquisitions, and cost savings initiatives. Additionally, UGI Corporation's diversified energy portfolio and strong distribution network contribute to the segment's growth. Furthermore, investments in technology and operational efficiencies also support the growth momentum.

Utilities

Expected Growth: 4.5%

UGI Corporation's 4.5% growth in Utilities segment is driven by increasing demand for natural gas, strategic acquisitions, and infrastructure investments. Additionally, favorable weather patterns, rate base growth, and cost savings initiatives contribute to the segment's growth.

Midstream and Marketing

Expected Growth: 3.8%

UGI Corporation's Midstream and Marketing segment growth of 3.8% is driven by increased natural gas demand, expansion of pipeline infrastructure, and strategic acquisitions. Additionally, growth in liquefied petroleum gas (LPG) exports and optimization of logistics and transportation operations contribute to the segment's growth.

Corporate and Other

Expected Growth: 2.8%

UGI Corporation's Corporate and Other segment growth of 2.8% is driven by increased cost savings initiatives, effective expense management, and strategic investments in growth projects. Additionally, the segment benefits from a strong balance sheet, enabling investments in high-return projects and opportunistic acquisitions, further enhancing growth prospects.

7. Detailed Products

LPG

Liquefied Petroleum Gas, a clean-burning fuel used for heating, cooking, and powering vehicles

Natural Gas

A fossil fuel used for heating, cooking, and generating electricity

Renewable Natural Gas (RNG)

A sustainable alternative to traditional fossil fuels, produced from organic waste

Electricity

A form of energy used for powering homes, businesses, and industries

Energy Services

A range of services including energy efficiency solutions, energy management, and energy procurement

Midstream Services

A range of services including natural gas gathering, processing, and transportation

8. UGI Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for UGI Corporation is moderate due to the availability of alternative energy sources such as renewable energy and energy-efficient solutions.

Bargaining Power Of Customers

The bargaining power of customers is low for UGI Corporation as the company operates in a regulated industry, and customers have limited alternatives.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for UGI Corporation as the company relies on a few large suppliers for its energy needs, but has some flexibility to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low for UGI Corporation due to the high barriers to entry in the energy industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for UGI Corporation as the company operates in a competitive energy market with several established players, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.30%
Debt Cost 6.39%
Equity Weight 37.70%
Equity Cost 9.62%
WACC 7.61%
Leverage 165.28%

11. Quality Control: UGI Corporation passed 0 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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Brookfield Infrastructure

A-Score: 6.7/10

Value: 8.9

Growth: 4.3

Quality: 5.8

Yield: 8.0

Momentum: 5.0

Volatility: 8.3

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ONE Gas

A-Score: 6.3/10

Value: 5.9

Growth: 4.4

Quality: 4.7

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

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UGI

A-Score: 6.2/10

Value: 5.6

Growth: 2.3

Quality: 4.1

Yield: 8.0

Momentum: 8.0

Volatility: 9.0

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Southwest Gas Holdings

A-Score: 5.9/10

Value: 4.2

Growth: 5.2

Quality: 3.5

Yield: 7.0

Momentum: 6.0

Volatility: 9.7

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Chesapeake Utilities

A-Score: 5.7/10

Value: 3.6

Growth: 4.7

Quality: 5.2

Yield: 4.0

Momentum: 7.0

Volatility: 10.0

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New Fortress Energy

A-Score: 3.7/10

Value: 9.8

Growth: 6.4

Quality: 2.5

Yield: 3.0

Momentum: 0.0

Volatility: 0.3

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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

37.53$

Current Price

37.53$

Potential

-0.00%

Expected Cash-Flows