Star Gas Partners LP : SGU-US: Dividend Analysis : April 28th, 2017 (record date) : By the numbers : April 26, 2017

Our analysis is based on comparing Star Gas Partners LP with the following peers – Suburban Propane Partners, L.P., AmeriGas Partners, L.P., Global Partners LP, Crestwood Equity Partners LP, UGI Corporation, Ferrellgas Partners, L.P., Delek US Holdings, Inc. and Sprague Resources LP (SPH-US, APU-US, GLP-US, CEQP-US, UGI-US, FGP-US, DK-US and SRLP-US).

Star Gas Partners LP’s dividend yield is 4.36 percent and its dividend payout is 60.07 percent. This compares to a peer average dividend yield of 8.24 percent and a payout level of 34.56 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. Supporting this is the company’s average dividend quality score of 42 out of a possible score of 100, which points to some weakness in being able to sustain the higher payout ratio.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to December 31, 2016), SGU-US paid a low quality dividend, which represents a yield of 4.28% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were high quality and 2 were low quality.
  • The ending cash balance, with a dividend coverage of 2.19x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to December 31, 2016), SGU-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.42x), investing cash flow (coverage of -1.31x), issuance cash flow (coverage of -1.23x) and twelve-month prior cash (coverage of 3.83x), for a total dividend coverage of 3.19x.

SGU-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.70x) and net share buybacks (coverage of -0.51x). Thus, the total coverage including share buybacks is 3.71x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-09-30 2013-09-30 2014-09-30 2015-09-30 2016-09-30 Latest
Dividend Yield (%) 7.41 6.8 6.05 4.38 4.28 4.36
Dividend Payout (%) 77.5 68.09 59.65 61.86 56.43 60.07

A complete list of metrics and analysis is available on the company page.

Company Profile

Star Gas Partners LP operates as a home heating oil and propane distributor and services provider to residential and commercial customers. It also engages in the provision of heating and air conditioning equipment, as well as diesel, fuel, and gasoline products. The company was founded on October 16, 1995 and is headquartered in Stamford, CT.


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