Suburban Propane Partners’ (SPH) YTD (year-to-date) total returns exceed those of its peers in the propane distribution industry. The company’s peers include AmeriGas Partners (APU), Ferrellgas Partners (FGP), and Star Gas Partners (SGU). Suburban’s YTD total returns are 39%, as compared to 31%, 22%, and 21% for APU, FGP, and SGU, respectively. The Alerian MLP Index (AMZ) has generated total returns of 6% so far in 2016.
In this series, we’ll analyze and compare the performances of Suburban Propane Partners, AmeriGas Partners, Ferrellgas Partners, and Star Gas Partners. We’ll compare the key metrics for these MLPs, including their earnings growth, yield, relative valuation, capital expenditures, and leverage. We’ll also analyze their future prospects.
As of May 5, 2016, Suburban Propane Partners has risen nearly 10% since its earnings announcement for the quarter, which ended on March 26, 2016.
Suburban Propane Partners
Suburban Propane Partners is the third-largest retail marketer of propane in the United States. It specializes in the distribution of propane, fuel oil, and refined fuels, as well as the marketing of electricity and natural gas in deregulated markets. SPH accounts for ~3% of the Yorkville High Income MLP ETF (YMLP).
AmeriGas Partners and Ferrellgas Partners
Based on the annual volume of propane distributed, AmeriGas Partners is the largest retail propane distributor in the US, with nearly 15% market share.
Ferrellgas Partners is the second-largest retail marketer of propane in the US based on retail sales volume in fiscal 2015. It’s engaged in the following:
- retail distribution of propane and related equipment sales
- midstream operations like crude oil logistics and water solutions, which started in 2015 and 2014, respectively
Star Gas Partners
Star Gas Partners is a home heating oil and propane distributor and service provider. It operates primarily in the Northeast and Mid-Atlantic regions of the US. Based on sales volume, it’s the largest retail distributor of home heating oil in the US. In fiscal 2015, SGU’s total sales came from home heating oil and propane (~72%), installation and repair of heating and air conditioning equipment (14%), and other petroleum products (14%).
In the next part, we’ll discuss the demand drivers for propane.