UGI Corp, is it a good long term buy now?

[win1177]

Looking at various energy companies, and it looks like UGI Corp. may be a good buy here. Has come down in price to a near 52 week low, has excellent and diverse income “streams”, selling at price to book value, excellent and growing dividend of 5.62%, etc. Selling at about a 31% discount to Morningstar “fair value”. Dividends are qualified.

What do others think about it as a long term holding???

Win

[uncleharley]

People who catch a falling knife usually bleed to death.

[win1177]

That’s what I worry about UncleHarley! Have not bought any, just exploring it as a “possible” option. What are your thoughts about UGI?


Win

[bizman]

win1177 ,

Without going really deep into UGI, I'd say stay away.  I looked at it a year ago or so and it didn't appear to be going well with the integration of the old Amerigas Propane into the company.  That piece seems like a slowly dying business.  

M*'s fair value is a quantitative rating, there is no analyst coverage.  They list it as "No Moat" and with a "Very High" uncertainty rating.  

If you pull up a long term chart of their competitor in the propane business, Suburban Propane Partners SPH, it's upper left to lower right since 2011 from a high of around $58 to a current price around $15.  I'm not much of a chartist, but that is one heck of a long term downtrend.

This one is screaming value trap to me.  Anything is possible, but I'm not one to be betting on a short squeeze or anything.  Good luck!

Edited to add:

Just listened to the earnings call from Thursday 8-3-23.  Operating expenses are up because of inflation and they took a $660 million non-cash goodwill impairment charge to reduce the carrying values of AmeriGas because of reduced growth expectations since the merger.  Though despite questions from Julien Dumoulin-Smith, they declined to update their growth projections from their long term 6-10% range and said wait for the 4th quarter report for updates.  Management sounded rather squirrelly and clueless to me.  Anyone want to buy now in advance of a probable kitchen sink announcement with the 4th quarter update?  I don't know the future, but absent a sea change or them winning the Mega Millions, there look to be much more favorable places to punt than here. Just my take. 
 

[mnfish]

From Wells -
the company took a $3.14/sh non-GAAP goodwill impairment at AmeriGas reflecting downwardly revised growth expectations and higher interest rates
This follows the guidance reduction on the fiscal Q2 call from the original $2.85-3.15 and furthers a string of disappointing updates as investors look for a bottom.
We reiterate our Equal Weight rating and lower our PT to $28/sh from $35/sh primarily reflecting our downwardly revised EPS/EBITDA outlook.

[win1177]

I’ve decided to “pass” on UGI. After further review, it looks like it’s in a long term downtrend, which makes me not interested in trying to find a “bottom”. Thanks for the comments UncleHarley and BIZMAN!

Win