Net Margin - UGI Corp (NYSE:UGI)

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Price: 37.18 USD 1.03%

Market Cap: 8B USD

9.3%

Current

Average

7.4%

Industry

Net Margin measures how much net income is generated as a percentage of revenues received. It helps investors assess if a company's management is generating enough profit from its sales and whether operating costs and overhead costs are being contained.

Net Margin

9.3%

Net Income

678m

Revenue

7.3B

Net Margin Across Competitors

Country		Company	Market Cap	Net Margin
US		UGI Corp NYSE:UGI	7.9B USD	9%
ES		Naturgy Energy Group SA MAD:NTGY	25B EUR	10%
US		Atmos Energy Corp NYSE:ATO	26.8B USD	25%
IT		Snam SpA MIL:SRG	19.7B EUR	39%
HK		Hong Kong and China Gas Co Ltd HKEX:3	133.8B HKD	10%
JP	T	Tokyo Gas Co Ltd TSE:9531	2.2T JPY	7%
JP		Osaka Gas Co Ltd TSE:9532	2.1T JPY	9%
IT		Italgas SpA MIL:IG	10.5B EUR	22%
IN		GAIL (India) Ltd NSE:GAIL	1.1T INR	8%
CN		ENN Energy Holdings Ltd HKEX:2688	77.4B HKD	5%
MY		Petronas Gas Bhd KLSE:PETGAS	36.4B MYR	28%

UGI Corp
Glance View

Economic Moat

None

Market Cap

8B USD

Industry

Utilities

UGI Corp., a company entrenched in the energy sector, has woven itself deeply into the everyday lives of its consumers through its multifaceted approach to energy distribution and services. Its narrative began over a century ago, evolving into a global energy juggernaut that adeptly balances traditional services with a commitment to modern energy solutions. Headquartered in the heart of Pennsylvania, UGI's operational prowess is evident in its diverse energy portfolio, which primarily comprises natural gas and propane distribution. The corporation's strategic footprint extends across the United States and into international markets, including Europe, where it has established a formidable presence through subsidiaries and partnerships. This mix of domestic and international operations allows UGI to leverage economies of scale, optimizing its supply chain to deliver competitive pricing and reliable service. UGI Corp. has structured its business model around four primary segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. Each segment operates with a specific focus, yet they are all united in bolstering the company’s overarching mission to deliver energy safely and efficiently. AmeriGas Propane, the standout among its segments, represents the largest retail propane distribution business in the United States. Its revenue is generated through the sale of propane to residential, commercial, industrial, and agricultural customers, offering both direct services and branded products. UGI International mirrors this model across various European countries, diversifying risk through geographical and market variation. Simultaneously, the Midstream & Marketing segment plays a crucial role by managing natural gas infrastructure and facilitating energy marketing strategies, which complement the regulated earnings from UGI Utilities. Collectively, these segments create a robust framework for sustainable growth, blending traditional energy solutions with forward-thinking initiatives in renewable energy and sustainability.

View UGI Analysis

UGI Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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UGI Corp
NYSE:UGI