Amerigas
Partners distributes propane to over two million residential, commercial,
industrial, agricultural and motor fuel customers in 50 states. It also installs and services propane
appliances and motor fuel systems. Earnings
have been flat over the past five years though dividends have increased at a 5%
rate. When coupled with the very
attractive yield of its stock, it offers an attractive total return. In that
period, return on equity averaged 15-30%.
APU should be able to continue
to grow its dividend as a result of:
(1) a broadly diversified geographic and
customer base,
(2) acquisitions.
Negatives:
(1) fluctuations in commodity prices,
(2) demand is subject to seasonal and weather
factors,
(3) potential impact of new energy regulations.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio* Since 2004
Ind Ave 3.6 4 58 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 45 11 NA 7 NA
* this is payout to cash flow
Chart
Note:
APU stock made good initial progress off its October 2008 high (straight red
line) and the November 2008 trading high (green line). The stock recently violated the lower
boundary of its long term uptrend (black lines). It is in an intermediate term trading range
(purple lines). The wiggly red line is
the 50 day moving average. The High
Yield Portfolio owns a 75% position in APU.
The upper boundary of its Buy Value Range is $18. The lower boundary of its Sell Half Range is
$65.
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