QUOTE AND NEWS
Forbes  Nov 18  Comment 
The directors of a company tend to have a unique inside view into the business, so when directors make major buys, investors are wise to take notice. Presumably the only reason a director of a company would choose to take their hard-earned cash...
Forbes  Nov 15  Comment 
In trading on Tuesday, shares of Suburban Propane Partners LP (NYSE: SPH) entered into oversold territory, changing hands as low as $27.61 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical...
Channel News Asia  Oct 15  Comment 
Profit attributable to shareholders fell from the S$321.7 million reported in FY2015, with a 4.5 per cent year-on-year fall in operating revenue to S$1.12 billion.
Forbes  Jul 25  Comment 
Suburban Propane Partners LP (NYSE: SPH) has been named as a Top 10 dividend paying utility stock, according to Dividend Channel, which published its weekly ''DividendRank'' report. The report noted that among utilities, SPH shares displayed both...
Motley Fool  Jun 2  Comment 
Low propane prices won't hurt Suburban as much as “bad” weather.
Forbes  May 13  Comment 
Suburban Propane Partners’ (SPH) 11% dividend is roughly equal to the S&P 500’s long run return. But in addition to the dividend, Ivan Kollar says SPH has the potential to appreciate 33% if oil prices stabilize or rise from here. That...
Forbes  Apr 25  Comment 
Suburban Propane Partners LP (NYSE: SPH) has been named as a Top 10 dividend paying utility stock, according to Dividend Channel, which published its weekly ''DividendRank'' report. The report noted that among utilities, SPH shares displayed both...





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Trends and Forces

Propane, a clean burning and non-toxic gas, is created as a byproduct of oil and natural gas processing and is used to heat homes, cooking and sometimes to power vehicles as Liquefied Petroleum Gas (LPG). According to the National Propane Gas Association, about 8.1 million households in the United States use propane to heat their homes as an inexpensive alternative to electricity. New Jersey based Suburban Propane services over 1 million residential and commercial customers in 30 states. Suburban Propane also provides customers the option to rent large propane tanks from them and since these tanks are often buried underground, switching to a different provider is not an easy option, giving Suburban Propane a "lock" on certain customers.

Hedging with Propane futures

The company hedges part of the propane it has in physical inventory by going short propane futures. When propane prices rose earlier this year, the company had to take a $14.5 million loss against its hedges in the fiscal third quarter ended June 28, 2008. This was right before oil hit its peak of $147 in July. If the company continued its hedging activity in its fiscal fourth quarter, which ended September 2008, the sharp decline in oil and propane prices during the quarter should prove beneficial to the company. Even if the company suspended its hedging program, the decline in propane prices should benefit the company as there should be no significant drop in retail propane prices that Suburban Propane charges its customers. This is one of the key reasons whySuburban Propane attractive ahead of its fourth quarter conference call scheduled on Friday, November 14th, 2008.

The company also has a consistent history of raising quarterly distributions and has done so 19 times since 1999. Distributions in the recent past have been financed entirely through operating income and the company has built up its cash position to $118.6 million, while holding long-term debt steady at $548 million over the last three years.



References

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