UGI

UGI is a diversified energy holding company combining regulated natural-gas and electric utilities, midstream, and a large propane distribution business (AmeriGas). FY2025 marked a strong recovery: net income surged 152.0% to $678M and diluted EPS jumped 147.2% to $3.09, while operating income rose 43.8% to $1.11B on roughly flat revenue (+1.4% to $7.15B). The rebound lifted return on equity to 14.2% and operating margin to 15.5%. Cash generation is dependable — operating cash flow of $1.23B against $837M of capex — and the company funds a growing dividend ($322M, +1.3%) and modest buybacks ($33M).

The valuation is the draw. At $33.81 the stock trades at just 10.9x earnings and 1.0x sales, a steep discount to pure-play regulated utilities, reflecting the market's wariness of the propane segment. That wariness is earned: the five-year net-income record is volatile — $1.47B, $1.07B, then a -$1.50B loss in FY2023 (driven by propane-related impairments), $269M, and now $678M. The balance sheet carries meaningful leverage at 2.23x liabilities/equity with $6.53B of long-term debt, though debt was roughly flat and equity grew 9.9% to $4.78B, and retained earnings rose 12.0% to $3.33B.