Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share) (UGP)

FairStock Score: 57/100 — STEADY

Key Financials

Strengths

• Generates $1.9 billion in annual free cash flow (29.9% yield on market cap)
• Solid return on equity of 16.4% above cost of capital
• Attractive 5.5% dividend yield providing steady income returns

Concerns

• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share) is a small-cap energy company valued at $6.2 billion. The business generates $142.4 billion in annual revenue with a 0.2% net margin and $1.9 billion in free cash flow. From a quality standpoint, Ultrapar shows distressed Altman Z-Score of 1.1 warrants caution and adequate 16% ROE. On valuation, the stock is attractively valued at 12.2x earnings, with offers a 54% margin of safety vs Graham Number of $12. Growth dynamics show revenue growing at 7.2% and profit growth of -61.6%. The 5.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 57/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Ultrapar's consistent 16% ROE at just 12x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $1.9 billion in annual free cash flow (29.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the energy space. 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