The estimated intrinsic value of Suburban Propane Partners, L.P. (SPH) using a Dividend Discount Model (DDM) is $43.33 (based on the recommended DDM method), compared to the current stock price of $19.63. This suggests the stock may be undervalued by 120.7% relative to its intrinsic value.

For utility companies, which are valued primarily for their stable and predictable dividend streams, SharesGrow uses a Dividend Discount Model (DDM): Intrinsic Value = Annual Dividend ÷ (Cost of Equity − Dividend Growth Rate). This model assumes a long-term dividend growth rate of 4% — consistent with the historical average for regulated utilities — and uses a minimum 7% cost of equity. The DDM is the preferred valuation method for income-oriented stocks with stable payout histories.

The valuation uses a CAPM-derived discount rate of 4.09% (CAPM-derived from beta of 0.40). For comparison, the standard 20-year DCF model produces: Operating Cash Flow (OCF): $66.38 | Free Cash Flow (FCF): $19.73 | Net Income (NI): $68.52.

• High debt relative to cash flow. Our Discounted Cash Flow (DCF) model deducts net debt from the present value of future cash flows, which significantly reduces equity value per share. Analyst price targets typically do not subtract debt in the same way.
• Using Trailing Twelve Months (TTM) data. Our model is using the most recent four quarters of data, which may not yet reflect the full earnings trajectory that analysts are forecasting. If the company is in a growth phase, TTM cash flows may understate future potential.