Winter Heating Season Is Here, and $90,000 Across These 3 Propane and Heating Oil Stocks Pays $5,424 a Year
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Heating season is underway across the Northeast, and propane and heating oil distributors are back on their winter delivery schedules. For the companies that run those trucks, the cold months bring in most of the year’s cash, and part of that cash goes to investors every quarter.
A $30,000 stake in each of three high-yield heating distributors would total $90,000 invested and $5,424 in annual passive income. Each figure annualizes the most recent regular quarterly payout at Nov. 13, 2026 prices, so the numbers will move as prices and payouts change.
Two of the three names on this list are master limited partnerships. This means that these businesses trade like stocks but are organized as partnerships. A partnership generally pays no tax itself. It passes its results through to owners on a Schedule K-1 instead of a 1099, and owners report their share whether or not they received it in cash. In an IRA, partnership income can generate unrelated business taxable income (UBTI). An IRA with $1,000 or more in gross unrelated business income generally must file Form 990-T.
UGI Corporation
- Stock #3: UGI Corporation (NYSE:UGI | UGI Price Prediction)
- Dividend Yield: 3.97%
- Shares for $30,000: 794.91
- Annual Passive Income: ~$1,192
UGI has four businesses: a Pennsylvania gas and electric utility, a midstream and marketing unit, a European LPG distributor, and AmeriGas. AmeriGas is the largest U.S. retail propane distributor, with over 1 million customers. UGI is a regular corporation, so it pays a standard dividend and issues no K-1.
The quarterly dividend has been $0.375 since the June 2023 ex-date. Before that, it was $0.36. On coverage, the winter quarter alone produced adjusted diluted EPS of $2.09[1], compared with a $1.50 annual dividend. UGI’s winter-quarter report announced a $685 million[1] asset-sale program to cut debt. AmeriGas poses the biggest risk, with retail gallons falling 10% in the June quarter because of warmer weather and lost customers.
Star Group
- Stock #2: Star Group (NYSE:SGU)
- Distribution Yield: 6.04%
- Units for $30,000: 2,293.58
- Annual Passive Income: ~$1,812
Star Group is a retail home heating oil distributor. It sells heating oil, propane, and equipment service to homes and businesses across the Northeast and Mid-Atlantic. As a partnership, it sends much of its cash to unitholders, which supports its higher yield.
The quarterly payout has risen every year, from $0.1625 in 2023 to $0.1725 in 2024, $0.185 in 2025, and $0.1975 starting in April 2026. Winter results fund the payout: in the quarter ended March 31, 2026[2], net income was $108.28 million and Adjusted EBITDA rose to $138.65 million from $128.18 million. The June quarter then showed the usual off-season loss. A shrinking customer base is the biggest risk: volume fell 9.4%[3] that quarter as more customers left than signed up. IRA holders should plan for the K-1 and possible UBTI filing.
Suburban Propane Partners
- Stock #1: Suburban Propane Partners (NYSE:SPH)
- Distribution Yield: 8.04%
- Units for $30,000: 1,723.15
- Annual Passive Income: ~$2,412
Suburban Propane serves about 1 million customers from about 750 locations in 42 states. It sells propane and fuel oil and also produces renewable natural gas. Like Star Group, it is an MLP that sends much of its cash to unitholders, and it has the highest yield of the three.
The distribution stayed at $0.325 from August 2021 until the Nov. 3, 2026 ex-date, when it rose to $0.35. The balance sheet improved along the way. Leverage fell to 4.13x from 4.29x, total debt dropped by more than $25M, and notes due March 2027 were refinanced into 6.5% notes due December 2035. Michael Stivala, chief executive at the time of the Nov. 12, 2026 filing, credited “the progress we have made in strengthening our financial position” for the increase. The main risk is weather: fiscal 2026 ran 8% warmer than normal. The K-1 and UBTI considerations apply here too.
Warm Winters and Lost Customers Can Shrink Payouts
Warm winters cut the number of gallons sold, and fuel prices affect profit per gallon. Average propane prices at Mont Belvieu fell 7.1% year over year during Suburban’s fiscal 2026. Each of the three companies also loses customers over time, including homes that switch to electric heat pumps.
Summary Table: $5,424 from $90,000
| Name | Yield or Distribution Rate | Annual Dividend Income |
|---|---|---|
| UGI Corporation | 3.97% | $1,192 |
| Star Group | 6.06% | $1,819 |
| Suburban Propane Partners | 8.04% | $2,412 |
| Total | 6.03% | $5,424 |
Cold Weather Pays the Bills
These 3 positions together generate $5,424 in annual passive income on a $90,000 investment, a combined yield of 6.03%. Suburban Propane contributes $2,412, Star Group adds $1,819, and UGI adds $1,192. These companies make most of their cash when cold weather comes. For their owners, that shows up as a quarterly cash payment without selling shares. A colder winter can strengthen the payouts, and a warmer one tests them.
Contact [email protected] for any questions or corrections.
David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
