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Superior Plus Corp. (TSE:SPB)
TSX:SPB

Superior Plus (SPB) AI Stock Analysis

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Superior Plus

(TSX:SPB)

64Neutral
Superior Plus shows potential for growth with strategic initiatives and positive guidance for 2025. Improved gross profit margins and reasonable cash flow management are key strengths. However, declining revenue, increased leverage, and a negative net profit margin are significant risks. The technical analysis indicates bullish sentiment, but valuation concerns persist due to profitability issues. The combination of these factors results in a moderate overall score.

Superior Plus (SPB) vs. S&P 500 (SPY)

Superior Plus Business Overview & Revenue Model

Company DescriptionSuperior Plus Corp. engages in the energy distribution business. It operates through two segments, U.S. Propane Distribution and Canadian Propane Distribution. The U.S. Propane Distribution segment distributes and sells propane, heating oil, and other liquid fuels in the Northeast, Atlantic, the Southeast, the Midwest, and California. It also provides installation, maintenance, and repair services for propane and heating oil equipment. The Canadian Propane Distribution segment distributes and sells propane, and propane-consuming equipment; rents tanks, cylinders, and other equipment; and provides equipment supply, installation, and repair services. This segment offers its service in Canada and the United States. Superior General Partner Inc. serves as the general partner of the company. As of February 10, 2022, the company served approximately 780,000 customers The company was founded in 1996 and is headquartered in Toronto, Canada.
How the Company Makes MoneySuperior Plus generates revenue through its Energy Distribution and Specialty Chemicals segments. The Energy Distribution segment is the primary source of revenue, earning money by selling and delivering propane and other fuels to residential, commercial, and industrial customers. This segment also provides related services such as equipment installation and maintenance. The Specialty Chemicals segment contributes to the company’s earnings by manufacturing and selling chemicals like sodium chlorate, which is used in the pulp and paper industry, and chlor-alkali products, used in various industrial applications. The company’s revenue streams are supported by long-term customer relationships and, in some cases, multi-year contracts. Additionally, strategic acquisitions and partnerships enhance their market presence and operational efficiencies, further bolstering revenue generation.

Superior Plus Financial Statement Overview

Summary
Superior Plus shows a mix of financial strengths and weaknesses. While gross profit margins improved, revenue and net income have deteriorated, impacting profitability. Increased leverage poses financial risks, and declining ROE suggests reduced shareholder value. Despite these challenges, the company maintains reasonable cash flow management, crucial for its operations.
Income Statement
60
Neutral
Superior Plus experienced a significant decline in total revenue from 2023 to 2024, dropping by approximately 28.96%. The gross profit margin improved from 45.66% in 2023 to 53.90% in 2024, indicating better cost management despite lower revenue. However, the net profit margin turned negative in 2024, at -1.54%, compared to 1.54% in 2023, primarily due to a net loss. The absence of EBIT in 2024 hinders the ability to evaluate operating efficiency, but EBITDA margin remained healthy at 16.24%.
Balance Sheet
55
Neutral
The company's debt-to-equity ratio increased from 1.74 in 2023 to 2.11 in 2024, highlighting a rising leverage risk. The equity ratio decreased from 27.57% to 24.03%, indicating reduced financial stability. Return on Equity (ROE) declined to -4.15% in 2024 due to net losses, compared to 3.62% in 2023, reflecting declining shareholder returns.
Cash Flow
70
Positive
Operating cash flow decreased to $274.1 million in 2024 from $550 million in 2023, impacting cash generation capabilities. Free cash flow also dropped significantly by 67.5%, affecting liquidity. However, the operating cash flow to net income ratio remains strong, suggesting efficient cash flow management relative to earnings.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.38B3.35B3.38B2.39B2.39B
Gross Profit
1.28B1.53B1.19B912.70M1.11B
EBIT
0.00272.30M182.30M117.10M246.00M
EBITDA
387.00M569.20M203.30M318.20M328.51M
Net Income Common Stockholders
-36.80M51.60M-87.90M17.20M58.89M
Balance SheetCash, Cash Equivalents and Short-Term Investments
17.10M48.30M58.40M81.00M67.80M
Total Assets
3.69B5.17B4.48B3.56B3.83B
Total Debt
1.87B2.48B2.15B1.63B1.83B
Net Debt
1.85B2.44B2.09B1.60B1.80B
Total Liabilities
2.54B3.40B3.02B2.25B2.55B
Stockholders Equity
885.80M1.43B1.11B983.60M949.20M
Cash FlowFree Cash Flow
113.70M349.80M131.40M126.90M243.90M
Operating Cash Flow
274.10M550.00M248.70M232.00M360.20M
Investing Cash Flow
-142.10M-467.10M-632.10M172.00M-384.20M
Financing Cash Flow
-144.70M-99.70M410.90M-399.60M22.50M

Superior Plus Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.43
Price Trends
50DMA
6.30
Positive
100DMA
6.30
Positive
200DMA
6.93
Negative
Market Momentum
MACD
0.05
Positive
RSI
54.87
Neutral
STOCH
10.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SPB, the sentiment is Positive. The current price of 6.43 is below the 20-day moving average (MA) of 6.56, above the 50-day MA of 6.30, and below the 200-day MA of 6.93, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 54.87 is Neutral, neither overbought nor oversold. The STOCH value of 10.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SPB.

Superior Plus Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSKEY
78
Outperform
C$10.19B20.9517.35%4.56%2.89%14.76%
TSPKI
66
Neutral
C$6.27B49.464.00%3.89%-12.79%-72.79%
65
Neutral
$12.17B16.155.32%4.37%5.50%-9.06%
TSSPB
64
Neutral
C$1.51B73.50-3.83%9.10%-2.75%-165.76%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SPB
Superior Plus
6.58
-2.61
-28.40%
ENB
Enbridge
44.57
10.97
32.65%
GBNXF
Gibson Energy
15.40
-0.34
-2.16%
TSE:KEY
Keyera Corp.
45.21
11.46
33.96%
TSE:PKI
Parkland
35.40
-4.82
-11.98%
TOLWF
Trican Well Service
3.36
0.38
12.75%

Superior Plus Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: 9.17% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted the company's strategic initiatives and positive outlook for 2025, including growth in the propane segment and strategic share repurchases. However, challenges from warm weather and decreased performance in certain segments like Canadian and wholesale propane were notable. The company is optimistic about its transformative initiatives and future growth, but current headwinds indicate a balanced view.
Highlights
Superior Delivers Initiative
The company announced the 'Superior Delivers' initiative, aiming for a $40 million improvement in EBITDA run rate by the end of 2025, which is 80% of the original target.
Certarus Growth
Certarus delivered a strong quarter with a 13% year-over-year increase in adjusted EBITDA, driven by a 15% increase in MSUs.
Share Repurchases
Superior Plus invested CAD$86 million to repurchase more than 5% of its outstanding shares, with a plan to buy back nearly 10% of the company in 2025.
2025 Guidance
The company issued a guidance of 8% growth for the propane segment, supported by a $20 million contribution from the Superior Delivers initiative.
Lowlights
Weather Impact on Propane
Warm weather negatively impacted the propane results, with Q4 adjusted EBITDA declining by approximately $3 million compared to the previous year.
Canadian Propane Decline
Canadian propane adjusted EBITDA was down 20% year-over-year in Q4, due to carbon credit sales timing and divestiture impacts.
Wholesale Propane Challenges
Fourth quarter adjusted EBITDA for wholesale propane was down 13% year-over-year, driven by weaker market differentials and lower sales volumes due to warm weather.
Increased Leverage
The leverage ratio increased from 3.9 times to 4.1 times year-over-year, aligning with expectations and reflecting share repurchases and lower adjusted EBITDA due to warmer weather.
Company Guidance
During the Superior Plus fourth quarter results conference call for fiscal year 2024, the company provided guidance for 2025, highlighting an anticipated 8% growth in the propane segment, supported by a $20 million contribution from the "Superior Delivers" initiative. This contribution is expected to result in a $40 million improvement in the company's EBITDA run-rate, approaching 80% of the original target of $50 million by the end of 2025. Additionally, the company plans to scale back capital spending in certain segments, like Certarus, to optimize performance and strengthen free cash flow. The guidance also includes a shift in capital allocation strategy favoring share repurchases, with over CAD$86 million already invested in repurchasing more than 5% of outstanding shares. The expected outcomes for 2025 include doubling free cash flow by enhancing EBITDA, reducing capital expenditures, and executing share buybacks amounting to nearly 10% of the company, all while aiming for half a turn reduction in leverage.

Superior Plus Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Superior Plus Appoints Dale Winger as President of Certarus
Positive
Mar 20, 2025

Superior Plus Corp. announced the appointment of Dale Winger as President of Certarus, succeeding Natasha Cherednichenko. Winger, with extensive experience in the chemical and oilfield service sectors, will focus on optimizing asset performance and driving growth in the company’s compressed natural gas division. His leadership is expected to enhance Certarus’ strategic direction and expansion efforts, reflecting Superior Plus’s commitment to leading in the energy transition and improving stakeholder value.

Executive/Board ChangesShareholder Meetings
Superior Plus Announces Strategic Board Changes
Neutral
Mar 17, 2025

Superior Plus Corp., a company involved in energy and petrochemical industries, has announced the nomination of three new individuals, Laura L. Schwinn, Jean Paul Gladu, and William T. Yardley, for election to its board of directors at the upcoming 2025 annual shareholder meeting. This move is part of Superior’s regular board succession planning, aimed at enhancing the board’s expertise with individuals possessing significant operational, U.S. business, and energy industry experience. The announcement also includes the retirement of long-serving board members Mary Jordan and Doug Harrison, marking a strategic renewal of the board to address future opportunities and challenges.

Dividends
Superior Plus Declares 2025 Q1 Dividend, Reinforcing Shareholder Value
Positive
Feb 27, 2025

Superior Plus Corp. has announced a quarterly dividend of CAD $0.045 per common share for the first quarter of 2025, payable on April 15, 2025, to shareholders of record as of March 31, 2025. This decision reflects the company’s ongoing commitment to providing shareholder value and maintaining its annualized cash dividend rate at CAD $0.18 per share. The dividend is eligible for Canadian income tax purposes, underscoring Superior’s stable financial strategy and its focus on sustainable growth within the energy distribution sector.

Business Operations and StrategyFinancial Disclosures
Superior Plus Corp. Reports Strong 2024 Results and Strategic Growth Plans
Positive
Feb 26, 2025

Superior Plus Corp. reported a 10% increase in full-year 2024 Adjusted EBITDA to $455.5 million, despite a 2% decline in the fourth quarter. The company returned approximately $177 million to shareholders and expects an 8% rise in 2025 Adjusted EBITDA due to strategic initiatives and growth in its Compressed Natural Gas division. The Superior Delivers transformation is projected to add at least $50 million to Adjusted EBITDA by 2027, with $20 million anticipated in 2025. These efforts are designed to strengthen the company’s propane business and adapt to market changes, ensuring long-term profitability and increased cash flow.

Legal Proceedings
Superior Plus Wins Appeal, Strengthens Financial Position
Positive
Jan 31, 2025

Superior Plus Corp. announced that the Alberta Court of Appeal has overturned a prior decision, ruling in favor of Superior in a litigation case against Chemtrade Electrochem Inc. This decision means Superior is not required to pay a C$25 million reverse termination fee related to a 2016 Agreement, and it is entitled to the return of approximately C$28 million previously paid. This ruling positively impacts Superior’s financial standing and strengthens its position in the market as it recovers significant funds, enhancing stakeholder confidence.

Financial Disclosures
Superior Plus Schedules 2024 Year-End Financial Results Release
Neutral
Jan 27, 2025

Superior Plus Corp. announced the release schedule for its 2024 fourth quarter and year-end financial results, which will be available on February 26, 2025, followed by a conference call and webcast on February 27, 2025. This announcement reflects Superior’s ongoing commitment to transparency and engagement with stakeholders by providing timely updates on its financial performance and operations, potentially impacting investor confidence and market perception.

Superior Plus Repurchases 4.2% of Its Public Float in Q4 2024
Jan 6, 2025

Superior Plus announced that it repurchased 10.4 million common shares, representing 4.2% of its public float, between November 6, 2024, and the end of the year, at an average cost of C$6.43 per share. The repurchase is aligned with maintaining a leverage ratio near 4.0x, and future repurchase pace is expected to slow, aligning with savings from a revised dividend policy. The company plans to allocate approximately C$35 million per quarter to share repurchases until it reaches 10% of the public float under its NCIB, indicating a strategic effort to manage its capital structure and reward shareholders while maintaining financial stability.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.