Amerigas Partners (APU) sells propane to residential, commercial, industrial, agricultural and motor fuel customers. It also installs and services propane appliances and motor fuel systems. The company has grown earnings at a 13% pace in the last five years while dividends have increased at a slower 5% rate. In that period, return on equity averaged 30%+. APU has been impacted by warmer winter weather of late, but still should be able to grow profits as a result of:
(1) a broadly diversified geographic and customer base,
(1) fluctuations in commodity prices,
(2) demand is subject to seasonal and weather factors,
(3) potential impact of new energy regulations.
APU is rated A by Value Line, has a 74% debt to equity ratio and its stock yields 6.8%.
|Stock Yield||Dividend Growth Rate||Payout Ratio *||# Increases Since 2002|
|Debt/Equity||ROE||EPS Down Since 2002||Net Margin||Value Line Rating|
* this is payout to cash flow
**IND is the average of the Natural Gas Utility Industry as compiled by Value LIne
Note: APU stock made good progress off its October 2008 low, quickly surpassing the downtrend off its May 2007 high (straight red line) and the November 2008 trading high (green line). Long term, APU is in an up trend (blue lines). Intermediate term it is in a trading range (purple lines). The wiggly red line is the 50 day moving average. The upper boundary of APU's Buy Value Range is $39; the lower boundary of its Sell Half Range is $59. Our High Yield Portfolio does not currently own a position in APU; however, any weakness below $39 would prompt an initiation of a position.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in APU over the next 72 hours.