Of the analysts surveyed by Bloomberg, 89% rated Suburban Propane Partners (SPH) a “hold,” and 11% rated it a “sell.” None of the analysts gave a “buy” rating to SPH. The consensus one-year target price for SPH is $32.80. The stock is currently trading at $33.60. The target price represents a downside of nearly 2% for investors. The low and high target prices for SPH over the same period are $31 and $35, respectively.
In comparison, 40% of the surveyed analysts rated Ferrellgas Partners (FGP) a “hold,” and 60% rated it a “sell.” The above table shows recommendations for SPH from some of the brokers surveyed.
On July 21, 2016, SPH declared a distribution of $0.8875 per unit for the three months ending June 25, 2016. The distribution remained the same as in the previous quarter. The stock is currently trading at an attractive yield of more than 10%. In comparison, AmeriGas Partners (APU) is currently trading at a yield near 8%.
Suburban Propane Partners’ simple structure with no IDRs (incentive distribution rights), reasonable leverage, and an attractive yield makes it an MLP to watch.
Michael A. Stivala, president and CEO of SPH, said, “Despite the challenges presented by record warm temperatures in our first and second fiscal quarters of 2016, our balance sheet and liquidity position remain strong and the fundamentals of our business are unchanged. We continue to be well positioned to focus on our growth initiatives – both internally through refinements to our business model and externally through strategic acquisitions.”
To learn more about propane MLPs, read The Future of Propane According to Four MLPs.