Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company operates in four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. This week, I fundamentally analyze Suburban Propane’s stock. I review SPH’s business segments, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account Suburban Propane’s 2021 free cash flow of $197 million figure, a 3% growth rate of FCF (growth for the next 10 years), 10% discount rate, 3.095% long term growth rate (growth from 10 year mark in the future to perpetuity), 64 million shares outstanding, and $1,118 million of long term debt, the DCF analysis yields us an intrinsic value of $26.65 per share.
0:28 Business Overview
11:06 Key Ratios Analysis
20:19 Discounted Cash Flow Analysis / Intrinsic Value
Suburban Propane Partners’ Website: here.
Morningstar Key Statistics Link: here.
Useful Resources here.
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