Star Group L.P. Common Stock (SGU)

FairStock Score: 73/100 — STEADY

Key Financials

Strengths

• Generates $40 million in annual free cash flow (9.7% yield on market cap)
• High return on equity of 24.9% demonstrating efficient capital deployment
• Attractive 6.2% dividend yield providing steady income returns
• FairStock composite score of 73/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 0.9 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Star Group L.P. Common Stock is a micro-cap energy company valued at $414 million. Revenue stands at $1.8 billion, though the company is currently unprofitable. From a quality standpoint, Star shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 0.9 warrants caution. On valuation, the stock is deeply undervalued on a P/E basis at 6.6x, with offers a 39% margin of safety vs Graham Number of $21. Growth dynamics show revenue growing at 10.5% and profit growth of 8.6%. The 6.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 73/100 reflects above-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

The market underappreciates Star's consistent 25% ROE at just 7x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $40 million in annual free cash flow (9.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Without a clear path to profitability, continued cash burn forces either dilutive equity raises or debt accumulation that destroys shareholder value. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer