Star Group, L.P. (SGU) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Star Group, L.P. (SGU) Energy Operations & Outlook

Star Group, L.P. (SGU) is a leading U.S. provider of home heating oil, propane, and related services, serving over 493,000 customers. With a focus on full-service residential and commercial clients, SGU differentiates itself through integrated service offerings and a strong regional presence in the energy sector.

What Is the Investment Thesis for SGU?

The company's consistent profitability, evidenced by a 5.6% profit margin, coupled with a dividend yield of 5.82%, offers potential income for investors. Key to the investment thesis is the company's ability to maintain and grow its customer base, particularly in the full-service segment, which provides recurring revenue streams. Furthermore, the company's diversified service offerings, including HVAC installation and maintenance, provide additional revenue opportunities beyond fuel delivery. However, investors should be aware of the risks associated with commodity price fluctuations and weather-dependent demand.

Based on FMP financials and quantitative analysis

SGU Key Highlights

Market capitalization of $421M reflects the company's current valuation in the energy market.

• P/E ratio of 6.23 indicates a potentially undervalued stock relative to its earnings.
• Gross margin of 30.8% demonstrates the company's ability to maintain profitability in its core operations.
• Dividend yield of 5.82% offers an attractive income stream for investors.
• Beta of 0.33 suggests lower volatility compared to the broader market, potentially providing stability during market fluctuations.

Who Are SGU's Competitors?

SGU is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are SGU's Key Strengths?

Large customer base provides recurring revenue.

• Integrated service offerings enhance customer value.
• Established regional presence ensures efficient operations.
• Essential service creates stable demand.

What Are SGU's Weaknesses?

Vulnerability to commodity price fluctuations.

• Seasonality of demand due to weather patterns.
• Dependence on traditional heating fuels.
• Limited geographic diversification.

What Could Drive SGU Stock Higher?

Expansion of HVAC service offerings to drive revenue growth.

• Strategic acquisitions to increase market share and geographic reach.
• Implementation of customer loyalty programs to improve customer retention.
• Focus on energy efficiency solutions to attract environmentally conscious customers.

What Are the Key Risks for SGU?

Inconsistent delivery — missed Wall Street EPS estimates in 7 of the last 8 reported quarters.

• Insider selling — insiders were net sellers of roughly $8.5M recently.
• Commodity price fluctuations impacting profitability.
• Seasonality of demand due to weather patterns.
• Competition from alternative energy sources.
• Government regulations impacting heating fuel usage.
• Economic downturns reducing consumer spending.

What Are the Growth Opportunities for SGU?

• Expansion of HVAC Services: Star Group can capitalize on the growing demand for energy-efficient heating and cooling systems. By expanding its HVAC installation, maintenance, and repair services, the company can tap into a market projected to grow as homeowners seek to reduce energy consumption and costs. This expansion can be achieved through strategic acquisitions of smaller HVAC companies or through organic growth by training and deploying more technicians. The timeline for this growth is immediate and ongoing, with a focus on increasing service revenue by 10% annually.
• Strategic Acquisitions: The fragmented nature of the home heating oil and propane market presents opportunities for Star Group to acquire smaller, regional players. These acquisitions can expand the company's geographic footprint, increase its customer base, and create synergies through economies of scale. The company can target acquisitions in regions where it already has a presence or in adjacent markets to expand its reach. The timeline for strategic acquisitions is ongoing, with a goal of completing 1-2 acquisitions per year.
• Customer Loyalty Programs: Implementing robust customer loyalty programs can help Star Group retain existing customers and attract new ones. These programs can offer discounts on fuel deliveries, priority service, and other benefits to incentivize customers to remain loyal to Star Group. By leveraging data analytics, the company can personalize these programs to meet the specific needs and preferences of individual customers. The timeline for implementing customer loyalty programs is within the next year, with a focus on increasing customer retention rates by 5%.
• Energy Efficiency Solutions: As consumers become more conscious of their environmental impact, Star Group can offer energy efficiency solutions to help customers reduce their carbon footprint and lower their energy bills. These solutions can include energy audits, insulation upgrades, and the installation of energy-efficient heating and cooling systems. By positioning itself as a provider of sustainable energy solutions, Star Group can attract environmentally conscious customers and differentiate itself from competitors. The timeline for offering energy efficiency solutions is within the next two years, with a focus on generating 10% of revenue from these services.
• Geographic Expansion: Star Group can expand its geographic footprint by entering new markets where there is demand for home heating oil and propane. This expansion can be achieved through organic growth by opening new branches or through acquisitions of existing companies. The company can target markets with cold climates and a high percentage of homes that rely on heating oil or propane. The timeline for geographic expansion is within the next three years, with a focus on entering 1-2 new markets per year.

What Are SGU's Competitive Advantages?

• Established Customer Base: Star Group has a large and loyal customer base of over 493,000 customers, providing a stable revenue stream.
• Integrated Service Offerings: The company offers a comprehensive suite of services, including fuel delivery, HVAC installation, and maintenance, creating a one-stop shop for customers.
• Regional Presence: Star Group has a strong regional presence in key markets, allowing it to efficiently serve its customers and maintain a competitive advantage.
• Essential Service: Home heating is an essential service, creating consistent demand for Star Group's products and services, regardless of economic conditions.

What Does SGU Do?

Star Group, L.P., established in 1995 and based in Stamford, Connecticut, has evolved into a prominent provider of home heating and air conditioning products and services in the United States. Originally known as Star Gas Partners, L.P., the company rebranded in October 2017 to reflect its broader service offerings. Star Group primarily caters to residential and commercial customers, providing heating oil and propane delivery, along with comprehensive installation, maintenance, and repair services for heating and air conditioning equipment. As of September 30, 2021, Star Group served approximately 422,200 full-service residential and commercial home heating oil and propane customers and an additional 71,100 customers on a delivery-only basis. Furthermore, the company extends its services to include the sale of gasoline and diesel fuel to around 26,700 customers. Through Kestrel Heat, LLC, which acts as its general partner, Star Group, L.P. continues to solidify its position in the home energy solutions market, focusing on customer service and reliable energy delivery.

What Products and Services Does SGU Offer?

• Sells and delivers home heating oil to residential and commercial customers.
• Provides propane delivery services.
• Offers installation, maintenance, and repair of heating and air conditioning equipment.
• Sells diesel fuel and gasoline on a delivery-only basis.
• Provides plumbing services.
• Serves full-service residential and commercial home heating oil and propane customers.
• Sells gasoline and diesel fuel to retail customers.

How Does SGU Make Money?

• Generates revenue through the sale and delivery of home heating oil and propane.
• Earns income from installation, maintenance, and repair services for heating and air conditioning equipment.
• Profits from the sale of diesel fuel and gasoline.
• Recurring revenue from full-service customer contracts.

What Industry Does SGU Operate In?

Star Group, L.P. operates within the oil and gas refining and marketing industry, which is characterized by cyclical demand and sensitivity to commodity prices. The industry is undergoing a transition with increasing focus on energy efficiency and alternative energy sources. Star Group's focus on home heating oil and propane positions it in a market with established infrastructure, but also faces competition from natural gas and electricity. The company's ability to adapt to changing energy preferences and invest in energy-efficient solutions will be crucial for long-term success.

Who Are SGU's Key Customers?

• Residential homeowners requiring heating oil and propane.
• Commercial businesses needing heating oil and propane for operations.
• Customers seeking installation, maintenance, and repair services for HVAC systems.
• Gasoline and diesel fuel consumers.

The most recent 7 insider filings for Star Group, L.P. break down as 5 sales and 2 purchases. On net that is roughly 705K shares disposed (about $8.5M), a signal worth weighing alongside the fundamentals.

Quarterly Financial Performance: Star Group, L.P.

Revenue for Star Group, L.P. came in at $358.1M during Q3 FY2026, a 53.3% contraction versus the preceding quarter. The company recorded a net loss of $27.7M, with diluted EPS of $-0.85. Quarter-over-quarter revenue has been mixed, typical for a small-cap company operating in Energy. Across the four most recent quarters, SGU averaged $0.51 in diluted EPS.

SGU Valuation & Market Position

With a $421M market cap, Star Group, L.P. sits in the small-cap segment of the market. Relative to its peer group, SGU's quantitative score of 88/100 is above the peer average of 51/100.

Return on equity for Star Group, L.P. stands at 20.4%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 7.3%, showing how much profit it generates from its asset base. SGU trades at a trailing price-to-earnings ratio of 6.23, below the Energy sector average of ~15.80x. Its free cash flow yield is 13.4%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.87 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 17.4%, the inverse of the P/E and a quick read on earnings relative to price.

Star Group, L.P.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 2.69 places it in the grey zone, a middle ground that warrants monitoring.

Star Group, L.P. has missed Wall Street's EPS estimate in 7 of its last 8 reported quarters — a recurring pattern of falling short of estimates. Reported results have landed about 98.6% below estimates on average.

Company Profile

Star Group, L.P. operates in the Oil & Gas Refining & Marketing industry within the Energy sector. It is headquartered in Stamford, US. The company is led by CEO Jeffrey Woosnam. SGU has traded publicly since 1995.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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