UGI (UGI:NYS) Fundamental Valuation Report

Fundamental Valuation Report

UGI(UGI:NYS)

Utilities:Utilities-Regulated Gas

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$56.84 (USD) 26/11/2018

Weighted Valuation
$58.52 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.0%

Valuation Models Analyst Consensus: $61.00 (USD)
(in order of importance) Adjusted Book Value: $51.60 (USD)
Comparables: $64.94 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (UGI:NYS USD)

Price 56.84
Range 56.47 – 57.01
52 week 42.53 – 57.94
Open 56.47
Vol / Avg. 562537/918184
Mkt cap 9.88B
P/E 14.00
Div/yield 1.02/0.02
EPS 4.06
Shares 173.85M
Beta 0.51

Company Description

UGI Corp is an American holding company that, through its subsidiaries, is involved in the transport and marketing of energy and related services. UGI Corp’s Gas Utility and Midstream & Marketing divisions account for the vast majority of its total revenue. The Gas Utility business engages in the regulated distribution and transmission of natural gas to, primarily, the American states of Pennsylvania and Maryland. UGI Corp’s Midstream & Marketing division encompasses its Energy Services and Electric Generation activities. Within Energy Services, the company sells mainly natural gas to Mid-Atlantic and South Atlantic states through its owns processing, storage, and pipeline facilities. This division also generates and sells electricity through its portfolio of thermal power plants.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for UGI:NYS

Using a discounted cash flow model we generated an intrinsic value of $105.33 (USD) for UGI:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

UGI:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $105.33 1% 5% 1% 5%
WACC (or Ke) 4.84 $139.56 $82.83
Terminal Growth Rate 0.00 $84.44 $137.09
Tax Rate 0.04 $113.00 $97.82
Cash Flow 1,711,700,000 $95.60 $115.06
Capital Expenditures -544,900,000 $102.60 $108.05
Long Term Debt 4,300,900,000 $106.56 $104.09

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $64.94 (USD) for UGI:NYS. We also generated a valuation of $45.56 (USD) using other metrics and comparables.
The comparable companies were AmeriGas Partners (APU:NYS), NiSource (NI:NYS), New Jersey Resources (NJR:NYS), South Jersey Industries (SJI:NYS) and Vectren (VVC:NYS).

Company UGI:NYS End Date Value
Earnings/Share $4.06 (USD)
Book Value/Share $21.36 (USD)
Sales/Share $42.37 (USD)
Cash Flow/Share $5.91 (USD)
EBITDA/Share $8.70 (USD)
Price Based on Comps Adjustment Factor (%)
$104.16 (USD) -31.3
$62.59 (USD) -6.7
$70.47 (USD) -54.8
$34.09 (USD) -31.4
$191.10 (USD) -26.3
UGI:NYS Ratios Used Average Values APU:NYS NI:NYS NJR:NYS SJI:NYS VVC:NYS
13.43 PE Ratio 25.66 21.22 34.27 18.64 0.00 28.50
2.48 PB Ratio 2.93 4.96 1.82 2.75 1.94 3.19
1.25 PS Ratio 1.66 1.18 1.72 1.41 1.81 2.20
8.98 PCF Ratio 10.16 8.04 9.62 9.48 10.88 12.77
8.79 EV to EBITDA 21.96 10.71 11.95 18.72 54.42 13.99

Multiples

Using a multiples approach we generated a valuation of  $61.50 (USD) for UGI:NYS

Company UGI:NYS End Date Value
Earnings/Share $4.06 (USD)
Book Value/Share $21.36 (USD)
Sales/Share $42.37 (USD)
Cash Flow/Share $5.91 (USD)
EBITDA/Share $8.70 (USD)
Price Based on Comps Adjustment Factor
$81.85 (USD) 0
$53.14 (USD) 0
$53.75 (USD) 0
$45.60 (USD) 0
$73.16 (USD) 0
Ratios Ratio Average
PE Ratio 20.16
PB Ratio 2.49
PS Ratio 1.27
PCF Ratio 7.72
EV to EBITDA 8.41

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  UGI:NYS for the last 10 years was  2.44

We ran the Adjusted Book Value for  UGI:NYS and generated a book value of  $21.19 (USD)
By multiplying these we get an adjusted valuation of  $51.60 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for UGI:NYS. The 1 analysts have a concensus valuation for UGI:NYS for 2019 of $61.00 (USD).

UGI:NYS UGI

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 0 5.0000 Buy 2018-11-23

Current Price: 56.84 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 2.87 3.09 3.28
# EPS Analysts 1 1 1
Mean Revenue 7,844.20 8,194.50 8,438.60
# Revenue Analysts 1 1 1
Mean Target Price 61.00
Mean Cash Flow 5.60 5.94 6.23
Mean EBITDA 1,571.50 1,647.90 1,711.70
Mean Net Income 508.70 546.40 576.50
Mean Debt Outstanding 4,386.60 4,526.50
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 700.00 700.00 700.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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