Dividend Aristocrats are outperforming so far in 2025. The ProShares S&P 500 Dividend Aristocrats ETF ( NOBL ) is down by just 3.4% year to date, posting more than 6 percentage points of alpha to the S&P 500.Freelance Financial Writer | Investments | Markets | Personal Finance | RetirementI create written content used in various formats including articles, blogs, emails, and social media for financial advisors and investment firms in a cost-efficient way. My passion is putting a narrative to financial data. ...

UGI Corporation (UGI) is expanding operations through strategic acquisitions, which should drive its performance. UGI’s capital investments help in system upgradation by replacement of aging infrastructure.  However, this Zacks Rank #3 (Hold) company faces competition from other clean sources and risks related to the seasonality of its business.Factors Acting in Favor of UGIUGI continues to make systematic capital investments to address the various capital projects, increase the safety and reliability of na ...

Core Viewpoint - UGI is currently considered a superior value option compared to Atmos Energy based on various valuation metrics [7] Valuation Metrics - UGI has a forward P/E ratio of 10.91, while Atmos Energy has a forward P/E of 20.88 [5] - UGI's PEG ratio is 2.27, compared to Atmos Energy's PEG ratio of 2.94 [5] - UGI's P/B ratio is 1.55, whereas Atmos Energy's P/B ratio is 1.82 [6] Earnings Outlook - Both UGI and Atmos Energy have a Zacks Rank of 2 (Buy), indicating an improving earnings outlook due to positive analyst estimate revisions [3] - The Zacks Rank system favors companies with strong earnings estimate revision trends, which applies to both UGI and Atmos Energy [2][3] Value Grades - UGI has been assigned a Value grade of B, while Atmos Energy has received a Value grade of F, highlighting UGI's stronger valuation position [6]

It has been about a month since the last earnings report for UGI (UGI) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is UGI due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. UGI Stock Trades Higher as Its Earnings Surpass Estimates in Q1U ...

Core Viewpoint - UGI has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][4]. - The recent upgrade for UGI reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [3][5]. Earnings Estimate Revisions - UGI is projected to earn $3.04 per share for the fiscal year ending September 2025, showing a year-over-year decline of 0.7% [8]. - Over the past three months, the Zacks Consensus Estimate for UGI has increased by 1.9%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - UGI's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - UGI is currently viewed as a superior value opportunity compared to Atmos Energy based on various valuation metrics [7] Valuation Metrics - UGI has a forward P/E ratio of 10.94, while Atmos Energy has a forward P/E of 20.85 [5] - UGI's PEG ratio is 2.28, compared to Atmos Energy's PEG ratio of 2.94 [5] - UGI's P/B ratio stands at 1.55, whereas Atmos Energy's P/B ratio is 1.82 [6] - UGI has been assigned a Value grade of B, while Atmos Energy has a Value grade of D [6] Earnings Outlook - Both UGI and Atmos Energy hold a Zacks Rank of 2 (Buy), indicating positive revisions to their earnings estimates [3]

Core Viewpoint - UGI Corporation is identified as a top rebound pick for 2024, having rebounded sharply from a recommendation price of $23 to $32, with potential to reach $40+ in the next 18 months through deleveraging [1] Company Summary - UGI Corporation's stock has shown significant recovery, indicating strong market interest and potential for further growth [1] - The company is viewed favorably for its risk/reward trade-off, appealing to fundamental analysis strategies [1] Investment Strategy - The investment approach includes options strategies such as covered calls on overvalued stocks and writing puts on desired stocks at lower prices, indicating a tactical investment methodology [1]

Core Viewpoint - UGI Corporation reported strong operating earnings for the first quarter of fiscal 2025, exceeding expectations, but total revenues fell short of estimates and declined year-over-year [1][3]. Financial Performance - Operating earnings for Q1 fiscal 2025 were $1.37 per share, surpassing the Zacks Consensus Estimate of $1.21 by 13.2% [1]. - GAAP earnings per share were $1.74, a significant increase from 44 cents in the same quarter last year [2]. - Total revenues amounted to $2.03 billion, missing the Zacks Consensus Estimate of $2.15 billion by 5.5% and declining 4.3% from $2.12 billion in the prior year [3]. Investment and Growth - UGI invested nearly $236 million in Q1 fiscal 2025, with 84% allocated to natural gas businesses [4]. - The company added over 4,000 customers in its Utilities segment during the quarter [4]. - Substantial completion was achieved on several RNG facilities, which will produce over 650 million cubic feet of RNG from dairy feedstock at full capacity [5]. Segment Performance - AmeriGas Propane reported EBIT of $71 million, up 4.2% year-over-year [7]. - UGI International's EBIT was $110 million, down 5.9% from the previous year [7]. - Midstream & Marketing's EBIT decreased by 6.9% to $95 million [7]. - UGI Utilities saw EBIT increase by 4.4% to $141 million [7]. Guidance - UGI reiterated its fiscal 2025 adjusted earnings guidance at $2.75-$3.05 per share, with the Zacks Consensus Estimate at $3 per share [8]. - The company plans to invest $800-$900 million in fiscal 2025 to enhance operations [8].

Financial Data and Key Metrics Changes - UGI Corporation reported adjusted diluted earnings per share (EPS) of $1.37, a 14% increase compared to the prior year [6][19] - The utility segment's EPS increased by one cent due to higher gas base rates at Mountaineer [19] - The overall effective tax rate for UGI corporate is expected to be between 12% and 14% for fiscal 2025, down from 16% in the prior year [22] Business Line Data and Key Metrics Changes - The natural gas business benefited from strong demand and higher gas rates, contributing to solid performance [7] - The midstream and marketing segment reported EBITDA of $95 million, down from $102 million in the prior year, primarily due to lower margins from gathering and processing activities [25] - UGI International saw a seven-cent increase in EPS, attributed to foreign tax credits offsetting lower operating income [20] Market Data and Key Metrics Changes - UGI Utilities experienced slightly colder weather than the prior year, leading to higher core market volumes [23] - LPG volumes at UGI International increased due to a colder winter, but total margin decreased by $15 million due to lower margins from the energy marketing business [26] Company Strategy and Development Direction - UGI Corporation is focusing on operational excellence and capital allocation to drive sustainable growth and long-term value creation [17][34] - The company is enhancing its AmeriGas operations through a new organizational structure aimed at improving customer experience and operational efficiency [15][16] - UGI is committed to optimizing its natural gas businesses while transforming its propane operations to improve performance [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the natural gas segment's performance, highlighting near-record demand and safe operational execution [42][68] - The company acknowledged the need for improvement in AmeriGas's business processes to better handle operational challenges during peak demand periods [66] - Management reaffirmed the guidance range of $2.75 to $3.05 for the fiscal year, indicating a strong start but recognizing challenges ahead [31] Other Important Information - UGI deployed over $200 million in capital investment during the quarter, primarily in natural gas businesses [8] - The company filed a gas base rate case requesting a distribution rate increase of approximately $110 million to support $750 million in investments [12] Q&A Session Summary Question: Thoughts on larger maturities coming up ahead - Management discussed the intercompany loan as a strategic move to manage near-term maturities and expressed confidence in cash flow from AmeriGas to repay the loan [40][41] Question: Strategic direction of the international business - Management indicated a focus on optimizing storage capabilities in Europe and evaluating the portfolio for competitive advantages [50] Question: Performance during cold weather and operational challenges - Management acknowledged benefits from colder weather but noted the need for improvements in AmeriGas's business processes to handle peak demand better [66] Question: Midstream margins and future capital allocation - Management explained that lower midstream margins were anticipated and attributed to contract renewals at lower pricing, while expressing optimism for future pricing opportunities [72][73]

Financial Performance - Net income attributable to UGI Corporation for the 2024 three-month period was $375 million, or $1.74 per diluted share, compared to $94 million, or $0.44 per diluted share, for the 2023 three-month period [142]. - Adjusted net income attributable to UGI Corporation for the 2024 three-month period was $295 million, or $1.37 per diluted share, compared to $258 million, or $1.20 per diluted share, for the 2023 three-month period [144]. - UGI International's adjusted net income increased by $17 million in the 2024 three-month period, mainly due to lower income tax expenses and reduced operating costs [147]. - AmeriGas Propane's adjusted net income decreased by $62 million in the 2024 three-month period, primarily due to higher income tax expenses [148]. - Utilities' adjusted net income increased by $3 million in the 2024 three-month period, attributed to higher total margin from increased base rates effective January 2024 [145]. - Midstream & Marketing's adjusted net income decreased by $3 million in the 2024 three-month period, primarily due to lower total margin from natural gas marketing activities [146]. - The increase in adjusted net income during the 2024 three-month period was also influenced by significantly lower income tax expenses related to investment tax credits [144]. Revenue and Margin Analysis - Utilities revenues decreased by $8 million (2%) to $485 million in the 2024 three-month period compared to $493 million in 2023, primarily due to lower Gas Utility revenues [151]. - Total margin for Utilities increased by $9 million (3%) to $274 million, driven by higher Gas Utility total margin from base rate increases effective January 1, 2024 [153]. - Midstream & Marketing revenues decreased by $27 million (7%) to $367 million, mainly due to lower revenues from natural gas marketing activities and the absence of revenues from UGID sold in September 2024 [158]. - UGI International revenues decreased by $87 million (12%) to $638 million, reflecting significantly lower energy marketing activities following the exit from the energy marketing business in Belgium, France, and the Netherlands [162]. - AmeriGas Propane revenues decreased slightly by $2 million (—%) to $627 million, with total retail gallons sold decreasing by 1% to 204 million gallons [168]. - Midstream & Marketing total margin decreased by $17 million (11%) to $138 million, primarily due to lower midstream margins from natural gas gathering and processing activities [160]. - UGI International total margin decreased by $15 million (5%) to $264 million, reflecting lower margin contributions from energy marketing activities [166]. Cash Flow and Liquidity - Cash flow provided by operating activities was $164 million in the 2024 three-month period, compared to $119 million in the 2023 three-month period [199]. - Cash flow used by investing activities was $232 million in the 2024 three-month period, up from $165 million in the 2023 three-month period [200]. - Cash flow from financing activities was $95 million in the 2024 three-month period, a significant increase from $3 million in the 2023 three-month period [202]. - UGI's total available liquidity balance was approximately $1.5 billion as of December 31, 2024, including cash and cash equivalents and available borrowing capacity [178]. - As of December 31, 2024, UGI's cash and cash equivalents totaled $240 million, up from $213 million at September 30, 2024 [182]. Debt and Financing - Consolidated interest expense increased by $2 million to $102 million in the 2024 three-month period, reflecting higher average long-term debt outstanding at Utilities and UGI Corporation [175]. - UGI Corporation's total long-term debt as of December 31, 2024, was $6.849 billion, compared to $6.678 billion at September 30, 2024 [183]. - UGI Utilities issued $50 million of 5.24% Senior Notes due November 30, 2029, and $125 million of 5.52% Senior Notes due November 30, 2034 [185]. - AmeriGas Partners has an outstanding principal balance of $218 million for 5.50% Senior Notes maturing in May 2025 [180]. - UGI Corporation entered into a $475 million revolving credit facility and a $400 million term loan facility in October 2024 [187]. - The average daily short-term borrowings for UGI Corporation was $263 million for the three months ended December 31, 2024 [192]. - UGI Utilities issued $50 million and $125 million principal amount of senior notes in 2024, compared to $250 million in 2023, with proceeds used to reduce short-term borrowings [202]. Regulatory and Operational Updates - PA Gas Utility filed a request to increase base operating revenues by $110 million annually, effective March 28, 2025, pending approval from the PAPUC [205]. - WV Gas Utility submitted a 2024 IREP filing requesting recovery of $19 million for capital investments totaling $197 million, including $74 million in 2025 [206]. - WV Gas Utility's 2023 IREP filing requested recovery of $10 million, an increase of $6 million, for capital investments totaling $131 million [207]. - A base rate case filing by WV Gas Utility sought a net revenue increase of $20 million, with a final order approving a $14 million increase effective January 1, 2024 [208]. Risk and Control - The company does not designate its commodity and certain foreign currency derivative instruments as hedges under GAAP, leading to volatility in net income attributable to UGI Corporation [137]. - A 10% decline in foreign currencies versus the USD would reduce the net book value of UGI International operations by approximately $75 million [222]. - The maximum potential loss from derivative instrument counterparties was $201 million as of December 31, 2024 [225]. - The fair value of commodity price risk derivatives was $45 million, reflecting a change of $(96) million due to market fluctuations [227]. - Management concluded that internal control over financial reporting was not effective due to a material weakness as of December 31, 2024 [231]. - The company is in the process of designing and implementing additional controls to validate cash flows used in the goodwill impairment test [231]. - A third-party specialist is being engaged to assist in developing valuation models and establishing reasonable assumptions [231]. - The identified material weakness cannot be considered remediated until controls have operated effectively for a sufficient period [232]. - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected the company's internal controls [233].