NEW YORK (

TheStreet

)

-- AmeriGas Partners

(NYSE:

APU

) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • AMERIGAS PARTNERS -LP's earnings per share declined by 48.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AMERIGAS PARTNERS -LP reported lower earnings of $1.51 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $1.51).
  • The revenue fell significantly faster than the industry average of 38.2%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Gas Utilities industry and the overall market, AMERIGAS PARTNERS -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for AMERIGAS PARTNERS -LP is currently lower than what is desirable, coming in at 35.00%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 6.20% is above that of the industry average.
  • Net operating cash flow has significantly decreased to -$11.85 million or 479.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

.

AmeriGas Partners, L.P., through its subsidiary, AmeriGas Propane, L.P., operates as a retail and wholesale distributor of propane gas in the United States. The company has a P/E ratio of 25.8, above the average utilities industry P/E ratio of 19 and above the S&P 500 P/E ratio of 17.7. AmeriGas has a market cap of $2.49 billion and is part of the

utilities

sector and

utilities

industry. Shares are up 0.3% year to date as of the close of trading on Tuesday.

You can view the full

AmeriGas Ratings Report

or get investment ideas from our

investment research center

.

-- Written by a member of TheStreet RatingsStaff

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