What is a master limited partnership (MLP) and how are distributions taxed?

MLP structure: master limited partnerships are pass-through entities organized as limited partnerships; they are publicly traded on stock exchanges (like common stock) but structured as partnerships with unitholders (limited partners) instead of shareholders. Pass-through tax treatment: MLPs do not pay corporate income tax; all income, gains, deductions, and credits flow through to individual unitholders in proportion to their units held; each year, unitholders receive a Schedule K-1 (instead of a 1099) detailing their share of the MLP's taxable income, deductions, and credits. Return of capital: many MLP distributions include a significant 'return of capital' component — the MLP distributes cash that is partly funded by depreciation deductions (which are non-cash expenses that reduce taxable income); the return of capital portion reduces the unitholder's tax basis in their units (deferred tax benefit); this means the unitholder may pay no taxes on return of capital distributions until they sell the units. Tax complexity: MLPs generate state tax filing requirements in each state where the MLP operates; unitholders may receive K-1s showing income in multiple states; MLPs are generally not appropriate for tax-deferred accounts (IRAs) due to potential unrelated business taxable income (UBTI) concerns. MLP evolution: many MLPs (including AmeriGas, the largest U.S. propane distributor) have converted back to regular corporations due to the K-1 complexity that discourages retail investors and institutions with ERISA restrictions; Suburban Propane remains an MLP.

How does propane pricing work and how does Suburban Propane manage price risk?

Propane supply: propane (C3H8) is a byproduct of crude oil refining and natural gas processing; approximately 60-70% of U.S. propane production comes from natural gas processing (NGL separation at gas plants); the remaining 30-40% comes from crude oil refining; propane prices trade as a percentage of WTI crude oil (typically 40-70% of WTI at Mont Belvieu, Texas — the U.S. propane hub). Price cycle: propane prices follow crude oil cycles but with additional volatility from seasonal heating demand (winters) and export demand (LPG tankers to Asia); propane can spike sharply in extremely cold winters when heating demand exceeds available storage drawdown rates. Suburban's buying strategy: Suburban purchases propane in advance of winter on the forward market to lock in buying prices; it also purchases from the spot market as needed during winter; the company stores propane in tanks and underground caverns to buffer supply; it must balance the cost of pre-buying (forward contracts lock in prices that may turn out to be high) against price risk (buying spot during winter can be expensive if prices spike). Customer pricing: Suburban sells propane to residential customers at fixed or variable price per gallon; high-volume customers and commercial accounts negotiate prices; the gross margin per gallon is the spread between what Suburban paid for propane and what it charges customers; when Suburban pre-buys at low prices and sells at high winter prices, margins expand; when it bought at high summer forward prices and customer price increases lag, margins compress.

What is Winter Storm Uri and how did it affect ONE Gas?

Winter Storm Uri (February 2021): an extreme cold weather event impacted Texas, Oklahoma, Kansas, and surrounding states with temperatures well below zero Fahrenheit in areas unaccustomed to such cold; millions lost power as electric generation capacity froze; natural gas system pressure dropped as demand for gas heating and gas-fired power generation surged simultaneously while gas production froze at the wellhead (natural gas wellheads and processing facilities froze in the unprecedented cold). The gas price spike: natural gas spot prices at the Waha hub in West Texas exceeded $600/MMBtu on February 17, 2021 (versus normal prices of $3-5/MMBtu); prices at other hubs spiked similarly; the prices reflected an actual shortage of natural gas supply relative to the extraordinary demand. ONE Gas impact: as a gas utility, ONE Gas's purchased gas adjustment (PGA) clause requires it to collect gas costs from customers; during Uri, ONE Gas purchased natural gas at these extraordinary spot prices to maintain customer supply; the extraordinary gas costs created a large receivable (amounts owed by customers) that ONE Gas had to pay upfront; ONE Gas financed these extraordinary gas costs with short-term borrowings; the total extraordinary costs for ONE Gas were approximately $2.2B — essentially a large unforeseen purchase of extremely expensive gas. Regulatory recovery: Oklahoma, Kansas, and Texas utility commissions approved securitization plans allowing ONE Gas to recover the extraordinary Uri gas costs over 10-25 years as special surcharges on customer bills; the securitization converted ONE Gas's liability to a long-term asset (a receivable from future customer payments); the regulatory recovery process extended over 2+ years of uncertainty before resolution.

Data as of: September 20, 2026

brimindinvest.com / compare / ogs-vs-sphLIVE

OGS

ONE Gas, Inc. · Utilities - Regulated Natural Gas Distribution

$75.19

-7.62% this month

VERSUS

COMPARE

SPH

Suburban Propane Partners, L.P. · Energy - Propane Distribution

$16.75

-5.85% this month

Comparison scoreboard

OGS LEADS 4/5

AI Scorei

OGS ✓33.5

SPH 24.5

1Y Returni

OGS ✓+2.87%

SPH -4.69%

Fwd P/Ei

OGS 15.80

SPH ✓8.05

Target Up.i

OGS ✓+12.02%

SPH +1.49%

Op. Margini

OGS ✓19.85%

SPH 0.78%

Metrics last refreshed: 9/20/2026

Quick take

OGS vs SPH Stock Comparison: AI Score, Valuation, Performance and Upside

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OGS (ONE Gas) and SPH (Suburban Propane) both serve heating fuel customers but through completely different business models — ONE Gas is a fully regulated natural gas utility with state-commission-approved returns and predictable earnings from rate base investment, while Suburban Propane is an MLP propane distributor serving customers without natural gas pipeline access, paying high distributions with weather-dependent earnings.

OGS vs SPH is fully regulated natural gas utility with bond-like earnings predictability (ONE Gas's regulated return on rate base across Oklahoma, Kansas, and Texas — customer growth in expanding markets, URI winter storm regulatory recovery, and consistent 3-5% dividend growth) versus propane distribution MLP with high current yield and weather-dependent volumes (Suburban Propane's rural heating fuel distribution to 800,000 customers without pipeline access — high 4-8% distribution yield, weather cyclicality, and long-term demand risk from natural gas expansion and electrification) — regulatory certainty versus high-yield distribution income.

Live analysis · updated 9/20/2026

OGS holds the edge across 4 of 5 key metrics in this comparison. OGS has delivered stronger 1-year price return (+2.87% vs -4.69%), though SPH has the better forward P/E setup (8.05x vs 15.80x for OGS). On fundamentals, SPH is growing revenue faster (0.50%), while OGS maintains the higher operating margin (19.85%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for OGS (+12.02%) than for SPH (+1.49%).

Normalized 1Y performance

OGS

SPH

Recent returns

OGS

SPH

Analyst price targets & sentiment

Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.

OGS

Price target range

analyst mean$89.56
current price$75.19

+12.0% upside to analyst mean

SPH · 1 analysts

Price target range

analyst low$17.00
analyst high$17.00
analyst mean$17.00
current price$16.75

+1.5% upside to analyst mean

Who should consider this stock?

OGS may suit investors who:

Prioritize maximum earnings predictability from a 100% regulated utility with no commodity price exposure and state commission-approved returns on rate base
Value ONE Gas's Texas and Oklahoma service territory growth as organic rate base expansion from new customer connections in growing markets
Seek consistent 3-5% annual dividend growth from a utility with a predictable payout ratio funded by regulated earnings

SPH may suit investors who:

Want above-market current income (4-8% distribution yield) from an MLP with an established propane distribution network and structural customer lock-in
Believe propane demand from rural residential customers without natural gas pipeline access is durable over the near-to-medium term despite electrification trends
Value Suburban Propane's strategic pivot to renewable natural gas as a hedge against long-term propane demand decline that positions the company for a sustainable energy transition

Performance & AI score

Performance & AI score
Metric	OGS	SPH
AI scorei	33.5	24.5
AI ranki	#2010	#3220
Latest closei	$75.19	$16.75
1M returni	-7.62%	-5.85%
6M returni	-8.84%	-13.80%
1Y returni	+2.87%	-4.69%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

$10,000 invested — hypothetical growth (dividends reinvested)
Period	OGS	SPH
1Y ago	$10.63K (+6.3%) started 2025-09-18	$10.22K (+2.2%) started 2025-09-18
5Y ago	$16.91K (+69.1%) started 2021-09-20	$24.9K (+149.0%) started 2021-09-20
10Y ago	$23.33K (+133.3%) started 2016-09-19	$50.93K (+409.3%) started 2016-09-19

Hypothetical — past performance does not guarantee future results.

Valuation & upside potential

Valuation & upside potential
Metric	OGS	SPH
Market capi	$5.03B	$1.12B
Trailing P/Ei	17.23	8.68
Forward P/Ei	15.80	8.05
Price/Salesi	N/A	0.80
EV/Revenuei	3.65	1.75
Analyst targeti	$89.56	$17.00
Target upsidei	+12.02%	+1.49%

Growth, profitability & risk

Growth, profitability & risk
Metric	OGS	SPH
Revenue growthi	-2.90%	0.50%
Earnings growthi	39.60%	N/A
EPS growthi	+39.60%	N/A
FCF margini	-9.51%	+5.70%
Operating margini	19.85%	0.78%
Profit margini	12.47%	9.37%
ROIC proxyi	8.58%	19.23%
Return on equityi	8.58%	19.23%
Dividend yieldi	3.38%	7.76%
Payout ratioi	58.19%	67.36%
Dividend growth streaki	11 yrs	No increase yet
Betai	0.66	0.37
Debt/equityi	95.90	186.21
Current ratioi	0.48	0.78
Quick ratioi	0.19	0.36

Correlation

Over the past year, OGS and SPH have moved weakly in the same direction (correlation of 0.28), based on daily returns.

1Y

0.28

-1.0+1.0

5Y

0.27

-1.0+1.0

10Y

0.30

-1.0+1.0

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

OGS max drawdowni15.84%

SPH max drawdowni19.03%

OGS max wkly dropi7.85%

SPH max wkly dropi12.66%

5Y risk snapshot

OGS max drawdowni33.50%

SPH max drawdowni20.01%

OGS max wkly dropi18.20%

SPH max wkly dropi14.12%

10Y risk snapshot

OGS max drawdowni33.50%

SPH max drawdowni55.70%

OGS max wkly dropi18.46%

SPH max wkly dropi39.03%

Performance metrics by period

Performance metrics by period
Period	Metric	OGS	SPH
1Y	Growthi	+2.87%	-4.69%
	CAGRi	+2.87%	-4.69%
	Volatilityi	18.22%	21.07%
	Sharpe ratioi	-0.00	-0.34
	Sortino ratioi	-0.00	-0.46
	Max drawdowni	15.84%	19.03%
	Current drawdowni	15.65%	16.61%
	Avg drawdowni	6.04%	5.35%
	Ulcer Indexi	7.84%	7.34%
	Max daily dropi	3.15%	5.75%
	Max wkly dropi	7.85%	12.66%
5Y	Growthi	+40.00%	+60.39%
	CAGRi	+6.97%	+9.92%
	Volatilityi	23.57%	25.08%
	Sharpe ratioi	0.22	0.32
	Sortino ratioi	0.29	0.46
	Max drawdowni	33.50%	20.01%
	Current drawdowni	15.65%	16.61%
	Avg drawdowni	11.97%	7.57%
	Ulcer Indexi	14.67%	8.94%
	Max daily dropi	17.64%	8.90%
	Max wkly dropi	18.20%	14.12%
10Y	Growthi	+64.30%	+24.55%
	CAGRi	+5.09%	+2.22%
	Volatilityi	25.94%	29.04%
	Sharpe ratioi	0.15	0.07
	Sortino ratioi	0.21	0.09
	Max drawdowni	33.50%	55.70%
	Current drawdowni	15.65%	16.61%
	Avg drawdowni	11.32%	15.88%
	Ulcer Indexi	14.32%	18.37%
	Max daily dropi	17.64%	17.78%
	Max wkly dropi	18.46%	39.03%

AI Prediction Signali

Members only

Next 5 trading days

OGS

+2.8%BUY

SPH

+1.1%HOLD

Next 30 trading days

OGS

+6.4%BUY

SPH

+3.2%HOLD

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Business comparison

Business comparison
Category	OGS	SPH
Company	ONE Gas, Inc.	Suburban Propane Partners, L.P.
Sector	Utilities	Energy - Propane Distribution
Industry	Utilities - Regulated Gas	Utilities - Regulated Gas
Core business	ONE Gas is a 100% regulated natural gas local distribution company (LDC) serving approximately 2.3 million customers in Oklahoma (Oklahoma Natural Gas), Kansas (Kansas Gas Service), and Texas (Texas Gas Service). ONE Gas was spun off from ONEOK Inc. in 2014 as a pure-play regulated utility. As an LDC, ONE Gas owns and maintains distribution pipelines, meters, and service connections that deliver natural gas from interstate pipelines to homes and businesses. ONE Gas's allowed returns are set by state utility commissions in Oklahoma, Kansas, and Texas through rate cases — the company earns a regulated return on its invested rate base (approximately 10% allowed ROE historically) and passes gas commodity costs directly through to customers (no commodity price risk to the utility).	Suburban Propane Partners is one of the three largest U.S. retail propane distributors (along with AmeriGas and Ferrellgas), serving approximately 800,000 customers across 41 states. Suburban Propane delivers propane by truck to residential customers (home heating, water heating, cooking), commercial customers (restaurants, businesses), agricultural customers (grain drying, crop/livestock heating), and industrial customers. As a master limited partnership (MLP), Suburban Propane distributes substantial quarterly cash distributions to unitholders (typically 4-8% distribution yield). Suburban has also been diversifying into renewable energy — acquiring small renewable natural gas (RNG) companies and investing in propane-adjacent sustainability businesses.
Investor focus	Investors track ONE Gas's rate base growth (the capital invested in distribution infrastructure that earns the regulated return), allowed ROE in rate cases, customer growth (new service connections in growing markets), earnings per share growth, and dividend growth.	Investors track Suburban Propane's gallons sold (volume), gross profit per gallon (selling price minus propane cost), heating degree day weather impact on residential demand, distribution coverage ratio, and the MLP distribution sustainability.

OGS strengths

100% regulated utility provides maximum earnings predictability and stability — ONE Gas's earnings are set by regulatory commissions and are nearly immune to commodity price cycles; the regulated return on rate base creates highly predictable, bond-like cash flows
Oklahoma and Texas service territories benefit from favorable regulatory relationships and growing customer bases — Oklahoma Natural Gas has constructive regulatory history; Texas Gas Service serves growing Texas markets including Austin suburban areas with new housing demand; growth markets drive organic rate base expansion
Consistent dividend growth supported by predictable earnings — ONE Gas's payout ratio and dividend have grown in line with EPS; utility investors can rely on annual dividend growth of 3-5%

SPH strengths

Large national propane distribution network serves customers in areas without natural gas pipeline access — approximately 12 million U.S. homes rely on propane for heating because natural gas pipelines don't reach their location; these customers are structurally dependent on propane and have limited alternatives to switching
Propane distribution has high customer switching costs — changing from a propane supplier requires returning the existing tank, having a new company deliver and certify a new tank, and potentially switching equipment; residential propane customers are highly loyal and switch providers rarely
High distribution yield (4-8%) appeals to income investors seeking above-market cash distribution from the MLP structure — as an MLP, Suburban passes through operating cash flow to unitholders with tax-advantaged treatment (return of capital reduces cost basis)

Risks to watch — OGS

Utility regulation can disallow capital investments from rate base — if utility commissions determine that capital spending was imprudent or unnecessary, they can exclude it from rate base; this reduces the return earned on that capital and creates earnings risk
ONE Gas's Texas service territory has significant weather exposure — the February 2021 Winter Storm Uri in Texas created catastrophic natural gas price spikes (spot prices exceeding $1,000/MMBtu briefly) that created substantial accounts receivable from customers who couldn't pay; regulatory recovery of these costs created extended uncertainty
Rising interest rates compete with utility dividend yields — as the 10-year Treasury yield rises, investors demand higher yields from utilities; this reduces utility stock prices (since future dividends are worth less at higher discount rates)

Risks to watch — SPH

Weather is the primary near-term earnings driver — warm winters reduce heating demand and propane volumes; a 10% decline in heating degree days can reduce gallon sales 8-10%; weather variability creates significant year-to-year earnings uncertainty
Propane faces long-term demand risk from natural gas expansion and heat pump electrification — where natural gas pipelines extend into formerly propane-only areas, customers convert to natural gas permanently; heat pump technology advances make electric heating more competitive; long-term propane demand in residential heating could decline structurally
Commodity propane price pass-through to customers creates pricing complexity — Suburban must balance buying propane at spot/forward market prices while setting customer prices that retain customers without cutting margin; propane price spikes can create customers who seek price quotes from competitors

Frequently asked questions

Regulated utility framework: utility companies (natural gas distribution, electric distribution, water) that have monopoly franchise areas are regulated by state public utility commissions (PUCs); the PUC grants the utility the exclusive right to serve customers in its franchise area in exchange for agreeing to have its prices and returns regulated. Rate case process: periodically (every 3-5 years typically), the utility files a rate case with the PUC requesting approval of new customer rates; the utility submits evidence of its rate base (invested capital in pipelines, compressors, meters, meters, buildings), operating expenses, and a requested allowed return on equity (ROE); the PUC reviews the filing, hears testimony from the utility, consumer advocates, and other parties, and issues an order setting allowed rates. Rate base and allowed ROE: the utility earns a return on its rate base; if rate base is $5B and the allowed ROE is 10%, the utility earns approximately $500M before debt costs; this allowed return is the fundamental source of utility earnings; utilities earn more by investing more in rate base (building pipelines, replacing aging infrastructure) and by achieving an allowed ROE that exceeds their actual cost of equity. Commodity pass-through: for gas utilities like ONE Gas, the cost of natural gas purchased for customers is passed through as a direct rate adjustment (purchased gas adjustment clause); this means the utility doesn't profit from high gas prices and doesn't suffer from low gas prices — the commodity cost is collected from customers dollar for dollar; only the distribution service component is subject to rate setting.

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