Suburban Propane Partners L.P. Common Stock (SPH)

FairStock Score: 73/100 — STEADY

Key Financials

Strengths

• Generates $49 million in annual free cash flow (3.8% yield on market cap)
• High return on equity of 22.7% demonstrating efficient capital deployment
• Attractive 6.8% 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

• High leverage at 2.29x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 0.8% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Suburban Propane Partners L.P. Common Stock is a micro-cap utilities company valued at $1.3 billion. The business generates $1.4 billion in annual revenue with a 3.2% net margin and $49 million in free cash flow. From a quality standpoint, Suburban shows distressed Altman Z-Score of 0.7 warrants caution and strong 23% ROE. On valuation, the stock is deeply undervalued on a P/E basis at 9.7x, with a modest 6% margin of safety vs Graham Number. Growth dynamics show revenue growing at -0.8% and profit growth of 135.7%. The 6.8% dividend yield adds an income component for patient holders. Our composite FairStock Score of 73/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Suburban's consistent 23% ROE at just 10x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $49 million in annual free cash flow (3.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.3x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. 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