Star Group announces annual financial results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 09 2025
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Should l Buy SGU?
Source: SeekingAlpha
Financial Performance: Star Group reported a fiscal year GAAP EPS of $1.82 and revenue of $1.78 billion, reflecting a 0.6% year-over-year increase.
Adjusted EBITDA Growth: For fiscal 2025, Adjusted EBITDA rose by $24.8 million (22.2%) to $136.4 million, driven by increases in both the base business and recent acquisitions, despite higher expenses from weather hedge contracts.
Market Outlook: The company faces challenges with lackluster growth prospects, leading to a downgrade in its rating despite a well-covered dividend.
Investment Insights: Seeking Alpha's Quant Rating indicates a need for more free cash flow from Star Group, highlighting concerns over its financial sustainability.
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Analyst Views on SGU
About SGU
Star Group, L.P. is a full-service provider specializing in the sale of home heating products and services to residential and commercial customers to heat their homes and buildings. The Company also sells and services heating and air conditioning equipment to its home heating oil and propane customers and, to a lesser extent, provides these offerings to customers outside its home heating oil and propane customer base. It also sells diesel, gasoline and home heating oil on a delivery only basis. It is a retail distributor of home heating oil operating in northern and eastern states within the Northeast and Mid-Atlantic U.S. regions, including its propane locations. The Company conducts its business through an operating subsidiary, Petro Holdings, Inc. It has heating oil and/or propane customers in the states: Connecticut, Delaware, Maryland, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia and the District of Columbia.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Customer Attrition Management: Despite modest net customer attrition during the period, management emphasized improvements in operational efficiency and execution as key factors in enhancing bottom-line results, indicating ongoing efforts in customer service and cost control.
- Volume Increase: Home heating oil and propane volumes rose by 11.5 million gallons or 14% year-over-year in Q1, benefiting from additional volumes from acquisitions and colder temperatures, although net customer attrition and other factors did impact overall sales.
- Optimistic Future Outlook: Management remains optimistic about acquisition opportunities, anticipating new prospects as spring approaches, while continuing to focus on customer service and cost control to address challenges posed by persistent cold weather.
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- Acquisition Investment Plan: The company outlines an $81 million acquisition investment aimed at expanding its business scale and market share, which is expected to lay the groundwork for future revenue growth.
- Volume Growth: Star Group reported a 12% increase in volume, which not only reflects rising market demand for its products but also indicates its strong position in a competitive industry.
- Market Outlook: With ongoing investments and expansion strategies, Star Group is expected to enhance its market competitiveness and achieve higher revenue and profitability levels in the future.
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- Yield Performance: The forward yield of 5.98% makes this dividend attractive in the current market environment, potentially drawing in income-seeking investors and enhancing the stock's appeal.
- Payment Arrangement: The dividend is payable on February 4, with a record date of January 26 and an ex-dividend date also on January 26, ensuring shareholders receive timely returns and reinforcing trust in the company.
- Expansion Plans: Star Group outlines an $81 million acquisition investment and anticipates 12% volume growth, reflecting a proactive strategy to expand market share and enhance profitability.
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