Company Overview
Ultrapar Participações S.A. operates within the energy, mobility, and logistics infrastructure sectors, serving markets across Brazil, Europe, North America, Latin America, Oceania, and internationally through its subsidiaries such as Ultragaz, Ipiranga, and Ultracargo. The company is classified within the Energy sector and specifically the Oil & Gas Refining & Marketing industry, positioning it as a key player in the processing and distribution of fuel and energy products globally. Ultrapar carries a market capitalization of $5.74B and reports annual revenue of $142.37B, with no specific employee count disclosed in current filings. These valuation and revenue figures indicate that the company possesses significant scale and operates as a major entity capable of influencing supply chains and market dynamics within the refining and marketing space, distinguishing it from smaller regional competitors.
Financial Health
The company reports revenue of $142.37B, net income of $2.66B, and EBITDA of $6.38B, highlighting a substantial gap between gross revenue and final profit that reveals a cost structure heavily influenced by the low-margin nature of the refining and marketing business. Free cash flow stands at $1.85B, which provides the company with financial flexibility to manage operations, service debt, or pursue strategic initiatives without relying solely on external capital markets. Gross margin is 6.6%, operating margin is 3.1%, and profit margin is 1.7%, indicating that the business model relies on high volume rather than high per-unit profitability, with operating costs consuming a significant portion of total revenue. Total cash on hand is $7.03B while total debt is $21.83B, resulting in a debt-to-equity ratio of 123.14%, which suggests the balance sheet is highly leveraged and relies on consistent cash generation to meet obligations. The current ratio is 1.62, indicating that the company holds sufficient current assets to cover its short-term liabilities, though the margin is moderate given the heavy debt load. Return on equity is 16.4% and return on assets is 7.0%, metrics that reveal management's effectiveness in generating returns relative to the shareholders' equity and the total asset base despite the high leverage.
Valuation Assessment
Ultrapar trades with a P/E ratio (TTM) of 11.93 and a forward P/E of 10.91, where the difference between these figures implies an expectation of earnings contraction or a decline in profitability in the upcoming period relative to the trailing twelve months. The price-to-book ratio is 1.92, indicating that the market values the company at nearly double its book value, suggesting a premium assigned to its intangible assets, brand, or future cash flow potential despite current earnings pressure. Alternative valuation metrics include a price-to-sales ratio of 0.04 and an EV/EBITDA of 3.54, which suggest the stock is priced very low relative to its sales and earnings power, potentially reflecting market concerns about the sustainability of margins or the high debt load. The 52-week high is $5.42 and the 52-week low is $2.71, meaning the stock has experienced significant volatility within the year, though the current price position relative to this range requires calculation based on the latest trading data not provided in the static facts. The beta is 0.59, which means the stock's price volatility is lower than the broader market, offering a more stable profile compared to highly cyclical peers but potentially limiting upside during bull markets.
Growth & Income
Revenue growth year-over-year is 7.2%, while earnings growth year-over-year is -59.5%, indicating that earnings are shrinking significantly faster than revenue, which implies that cost pressures or one-time expenses are severely impacting bottom-line profitability despite top-line expansion. As a dividend payer, the company offers a dividend yield of 5.9% with a payout ratio of 74.5%, a level that requires careful scrutiny given the negative earnings growth, as maintaining such a high payout becomes increasingly difficult when net income declines sharply. The company does not fall into the non-dividend payer category; rather, it continues to distribute income to shareholders, though the sustainability of this policy is challenged by the current earnings trajectory. Overall, the growth and income profile presents a mixed picture where modest revenue expansion is occurring alongside sharp earnings deterioration, supported by a high-yield dividend that may be pressured by the declining profitability metrics.