OppenheimerFunds, Energy Income Partners, and City National Rochdale hold 4.1%, 3.4%, and 1.6%, respectively, of AmeriGas Partners’ outstanding shares.
Suburban Propane Partners (SPH), the MLP involved in retail marketing and the distribution of propane, was upgraded by UBS last week, which ended on January 5, 2017.
Upstream MLPs EV Energy Partners (EVEP), Mid-Con Energy Partners (MCEP), and Legacy Reserves (LGCY) rose 17.6%, 13.7%, and 11.8%, respectively, in the week ended September 29.
In this series, we’ll discuss the ten MLPs with the highest yields. We’ll compare the yields they offer, the reasons for the high yields, and if the yields are attractive considering the risks involved for each of these MLPs.
The forward EV-to-EBITDA ratios for AmeriGas Partners (APU), Suburban Propane Partners (SPH), Ferrellgas Partners (FGP), and Star Gas Partners (SGU) are 10.4x, 9.4x, 8.3x, and 5.5x, respectively.
Of the four propane distribution MLPs—AmeriGas Partners (APU), Ferrellgas Partners (FGP), Star Gas Partners (SGU), and Suburban Propane Partners (SPH)—only Star Gas Partners stock is in the green so far in 2017.
Ferrellgas Partners’ adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) fell to $105 million compared to $138.3 million in the corresponding quarter last year.
Star Gas Partners (SGU) stock has risen 33% in 2016. In comparison, Suburban Propane Partners (SPH) and AmeriGas Partners (APU) have risen 23% and 30%, respectively.
Of the analysts surveyed by Bloomberg after Ferrellgas Partners’s fiscal 4Q16 results, 88% recommended a “sell” and the remaining 12% recommended a “hold.” None of the surveyed analysts rated FGP as a “buy.”
Suburban Propane Partners (SPH) reported its results for the quarter ending June 25, 2016, on August 4. The company reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $18.4 million for the quarter.
AmeriGas Partners (APU) and Star Gas Partners (SGU) reported a 14% and 31% YoY drop, respectively, in their EBITDAs in the quarter ended March 31, 2016.
Suburban Propane Partners’ YTD returns have exceeded those of peers APU, FGP, and SGU. The Alerian MLP Index (AMZ) has generated total returns of 6% YTD.
The rise in propane demand pushed the price of propane up $0.01 per gallon. Since propane is used for heat in some US households, propane demand generally rises in mid-winter months.
In its weekly petroleum status report released on January 13, 2016, the EIA stated that US propane inventories decreased by 4.5 MMbbls to 91.9 MMbbls for the week ended January 8, 2016.
The EIA’s weekly propane and heating oil update reported that US residential propane demand is 1.3 MMbpd (million barrels per day) for the week ended January 1.
US residential propane prices averaged $1.98 per gallon for the week ended December 14, or $0.02 per gallon higher than the prices on December 7, 2015.
As of the week ended December 11, propane inventories were at 98.9 MMbbls. These levels were 26.2% more than they were in the corresponding period last year.
The EV-EBITDA ratios for Ferrellgas Partners (FGP), AmeriGas Partners (APU), Suburban Propane Partners (SPH), and Star Gas Partners (AGU) are 16.1x, 10.5x, 8.8x, and 3.2x, respectively.
Propane demand for home heating purpose is directly affected by the severity of the winter. In any given region, colder-than-normal temperatures in the winter season tend to result in greater usage.
US residential propane prices were $1.93 per gallon for the week ended November 13, or $0.02 per gallon higher than prices for the week ended November 6.
In the week ended October 30, 2015, US propane inventories rose by 0.8 MMbbls to 102.4 MMbbls. This is 27.8% greater than in the corresponding period last year.
The JPMorgan Chase Alerian MLP Index ETN (AMJ) fell 6.1% in the week ended September 25. The Alerian MLP Index (AMZ) is AMJ’s underlying index and fell 5.9% during the week.
In the week ended September 11, US propane inventories rose 1.1 MMbbls to 97.7 MMbbls. These levels are 20.3 MMbbls greater, or 26.2% higher, than they were in the corresponding period last year.
In the week ended September 4, US propane inventories rose 0.2 MMbbls to 96.6 MMbbls. These levels are 20.5 MMbbls greater, or 27% higher, than they were in the corresponding period last year.
The J.P. Morgan Alerian MLP Index ETN (AMJ) rose 5.2% in the week ended August 28, 2015. The Alerian MLP Index (AMZ), AMJ’s underlying index, also rose 5.1% during the week.
Propane is a natural gas liquid (or NGLs). NGLs are hydrocarbons—in the same family of molecules as natural gas and crude oil. Other NGLs include Ethane, butane, and pentane.
Last winter, propane prices spiked as inventories saw record lows, thanks to severe winter. Prices touched a record high of ~$5 per gallon last winter.
Propane is an essential heating fuel. Its demand increases during the winter months. Much like natural gas, April through September is considered to be the “injection season” for propane. Last winter, propane prices spiked. Inventories saw record lows because of the severe winter. Prices touched a record high of ~$5 per gallon last winter.
APU competes with Suburban Propane (SPH) and Ferrellgas Partners (FGP). APU is the country’s largest retail propane marketer, serving 2 million customers in all 50 states.
APU reported 1Q14 adjusted EBITDA for the three months ended December 31, 2013, as $230 million, compared to consensus EBITDA of $202 million and compared to $193 million for the same period last year.
Prior to the Heritage deal, APU had an average EBITDA in the range of $340 million. For fiscal 2013 (ended September 30), the company delivered an EBITDA of $628 million.
AmeriGas Partners LP (APU) is a master limited partnership and the nation’s largest retail propane marketer, serving customers in all 50 states from approximately 2,500 distribution locations.
Extreme volatility in propane prices could negatively affect the margins of distributors such as Ferrellgas, as the company may not be able to immediately pass on the cost of more expensive propane to its customers. From many reports, this winter season was especially tough to manage given extreme weather resulting in high demand, spikes in price, and logistical problems getting propane to end customers.
Weather conditions have a significant impact on demand for propane as the volume of propane used is affected by the severity of the winter weather which may vary substantially from year to year. A warmer-than-normal temperatures will result in reduced propane usage, while a colder-than-normal temperatures will result in greater usage. This winter’s weather has […]
The fiscal year for FGP is calculated August 1 through July 31. FGP reported FY2Q14 adjusted EBITDA of $136 million, for the three months ended January 31, a 17% increase compared to the same period, the previous year and above the consensus forecasts of $118 million. LTM adjusted EBITDA was $287 million compared to $237 […]
Ferrellgas Partners, L.P. (FGP), a master limited partnership (MLP), is the second largest retail propane distributor in the U.S. serving all 50 states, the District of Columbia and Puerto Rico, as measured by the volume of retail sales in fiscal 2013, and the largest national provider of propane by portable tank exchange.
Last week saw slightly colder-than-normal weather, a positive for propane companies such as AmeriGas Partners (APU), Ferrellgas Partners (FGP), and Suburban Propane Partners (SPH).
Last week, propane prices (as priced at Mont Belvieu) increased 9%. Higher propane prices this winter could negatively affect propane companies’ earnings.
Propane distributors such as Amerigas Partners (APU), Ferrellgas (FGP), and Suburban Propane (SPH) sell propane and related equipment to a variety of end markets. Find out what trends could hurt propane names this winter.
Propane distributors such as Amerigas Partners (APU), Ferrellgas (FGP), and Suburban Propane (SPH) sell propane and related equipment to a variety of end markets.
