Suburban Propane Partners LP (SPH, Financial) has recently experienced a notable uptick in its stock performance. With a market capitalization of $1.11 billion, the current price of SPH stands at $17.39. Over the past week, the stock has gained 2.96%, and looking at a broader timeframe, it has surged by 19.69% over the past three months. This growth trajectory has caught the attention of investors, as the stock now hovers around the GF Value of $16.45, indicating that it is fairly valued. This is a shift from three months ago when the stock was considered modestly undervalued with a past GF Value of $16.73. Such movements in valuation are critical for value investors seeking to capitalize on market inefficiencies.
Understanding Suburban Propane Partners LP
Suburban Propane Partners LP operates within the regulated utilities industry, focusing on the distribution of propane, fuel oil, and other refined fuels. The company has a significant presence on both the East and West Coasts of the United States. In addition to its primary operations, Suburban Propane also engages in natural gas and electricity marketing in deregulated markets such as New York and Pennsylvania. The company's business is segmented into Propane; Fuel Oil and Refined Fuels; and Natural Gas and Electricity, with the Propane segment being the most lucrative.
Profitability Insights
When it comes to profitability, Suburban Propane Partners LP stands out with a Profitability Rank of 7/10. The company's operating margin is an impressive 14.47%, which is better than 55.36% of its industry peers. Its return on equity (ROE) is a robust 22.43%, surpassing 87.72% of competitors, while the return on assets (ROA) at 5.54% is higher than 73.83% of the industry. Furthermore, the return on invested capital (ROIC) stands at 9.10%, outperforming 80.39% of peers. These figures are a testament to the company's ability to generate profits and manage its resources effectively, with a consistent track record of profitability over the past decade.
Growth Trajectory and Industry Standing
Suburban Propane's growth metrics are equally compelling. The company's Growth Rank is 5/10. It has achieved a 3-year revenue growth rate per share of 7.90%, which is better than nearly half of its industry peers. The 5-year revenue growth rate per share stands at 1.90%, surpassing 28.63% of competitors. Notably, the 3-year EPS without NRI growth rate is an impressive 25.50%, which is higher than 82.3% of industry peers, and the 5-year EPS growth rate is 14.80%, better than 75.78% of competitors. These growth rates highlight the company's ability to expand its earnings and revenue over time, a key indicator of its long-term potential.
Market Position and Competitive Landscape
Suburban Propane Partners LP operates in a competitive landscape, with Northwest Natural Holding Co (NWN, Financial) having a market cap of $1.41 billion, RGC Resources Inc (RGCO, Financial) at $216.385 million, and OPAL Fuels Inc (OPAL, Financial) at $156.102 million. These competitors vary in size, but SPH's market cap suggests it holds a significant position within the industry. The company's financial health and growth prospects are critical factors that could influence its competitive edge moving forward.
Conclusion: A Balanced View on SPH's Prospects
In summary, Suburban Propane Partners LP's stock performance has been robust, with a significant gain over the past three months. The company is currently fairly valued according to the GF Value metric. Its profitability and growth ranks, along with superior operating margins and returns on equity, assets, and invested capital, paint a picture of a company that is not only profitable but also growing at a healthy pace. When compared to its competitors, SPH holds a strong position within the industry. For value investors, Suburban Propane Partners LP presents a compelling case, combining solid financials with a positive market outlook. As the company continues to navigate the regulated utilities space, its ability to maintain profitability and growth will be key to sustaining investor interest and stock performance.
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.
