We recently published a list of the 12 Best Mid-Cap Dividend Aristocrats to Invest in Now. In this article, we are going to take a look at where UGI Corporation (NYSE:UGI) stands against other mid-cap dividend aristocrats.
There’s a common misunderstanding that dividend payouts are mostly limited to large-cap companies, but mid-cap firms are often just as generous—and notably stable—when it comes to dividends. Recently, mid-cap dividend stocks, which had fallen out of favor, are making a comeback and drawing renewed interest from investment strategists. The MidCap Dividend Aristocrats Index, which includes 53 mid-sized companies that have raised their dividends for at least 15 consecutive years, has declined just 1.2% year-to-date through May 5. In comparison, the broader market has dropped 3.7% over the same period. Notably, these mid-cap companies generate about 82% of their revenue from within the US, significantly higher than the roughly 60% average for broader market firms and 53% for those in the Nasdaq Composite, based on data from S&P Dow Jones Indices and FactSet as of April 30.
READ ALSO: Dividend Challengers 2025: Top 25
Alongside investors, analysts are also recommending that income portfolios include mid-cap companies. According to Simeon Hyman, global investment strategist at ProShares, these stocks can help cushion downside risk amid current market volatility. He noted that this is particularly relevant for investors whose portfolios are heavily weighted toward large-cap growth names like the “Magnificent Seven” tech giants. Hyman emphasized the importance of diversifying equity exposure across a wider range of asset classes to help manage risk in today’s environment.
Analysts are leaning toward mid-cap dividend stocks largely because they appear undervalued. As of April 30, the MidCap Dividend Aristocrats Index had a price-to-earnings (P/E) ratio of 17.87, which is significantly lower than the P/E ratios of the broader market and the Nasdaq. Larry Adam, chief investment officer at Raymond James, made the following comment about this:
“Now is the time for bargain-hunting since midcap dividend stocks are trading at historically low valuations relative to large-cap stocks. They could be the sweet spot for investors when you consider they are more insulated from tariff exposure and are expected to outpace the earnings growth of large-caps this year.”
According to analysts, instead of picking individual mid-cap dividend stocks, investors should consider exchange-traded funds (ETFs) as an alternative. These funds offer tax efficiency and diversification across multiple industries and typically come with low expense ratios.
For instance, the WisdomTree U.S. MidCap Dividend ETF (DON), which manages $3.47 billion in assets, posted a year-to-date return of -6.47% through April 30, with a 12-month return of 4.72% and a 12-month yield of 2.54%. Its expense ratio stands at 0.38%. Meanwhile, the ProShares S&P MidCap Dividend Aristocrats ETF (REGL), with $1.69 billion in assets, returned -1.88% so far this year, delivered a 6.96% one-year return, and yields 2.60% over 12 months. Its expense ratio is 0.40%, according to Morningstar Direct.
Though both ETFs are showing negative returns for the year, their dividend payouts help cushion losses. Financial advisers often recommend reinvesting those dividends rather than withdrawing the cash, as this approach can build wealth over time by acquiring more shares while prices remain subdued.
A view of the skyline from an electricity pylon, to show the ubiquity of the companies energy products.
Our Methodology
For this list, we scanned the holdings of MidCap 400 Dividend Aristocrats, which tracks the performance of mid-sized companies within the MidCap 400 index that have maintained a consistent track record of increasing dividends annually for at least 15 years. From the index, we picked 12 dividend stocks that have garnered the most attention from hedge fund investors by the conclusion of Q4 2024, using data from Insider Monkey’s database. The stocks are ranked according to the number of hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
UGI Corporation (NYSE:UGI)
Number of Hedge Fund Holders: 27
UGI Corporation (NYSE:UGI) is an American diversified energy company with operations spanning natural gas utilities, midstream and marketing, international LPG, and AmeriGas has seen its stock lag due to weakness in its propane business. The stock is outperforming the broader market this year by a wide margin, surging by over 18% since the start of 2025. In the past 12 months, it has delivered a 37.6% return to shareholders.
Since its acquisition, AmeriGas has seen a significant drop in performance, with EBITDA falling from $584 million in 2019 to $320 million in 2024, and profit margins narrowing from 21.8% to 14.1%. Retail gallon sales have declined by 30%, a trend attributed to operational setbacks, subpar customer service, and unusually warm weather. These ongoing issues have led UGI Corporation (NYSE:UGI) to record $850 million in goodwill impairments over the past two years, effectively eliminating nearly half of the original goodwill tied to the acquisition. Despite these setbacks, the stock has recovered, delivering a return of over 15% since the beginning of 2025.
In the first quarter of fiscal 2025, UGI Corporation (NYSE:UGI) reported revenue of $2.03 billion, representing a 4.29% decline from the same quarter the previous year and falling short of analyst expectations by $617 million. Nonetheless, the company maintained a solid financial position, ending December 2024 with $1.5 billion in available liquidity. It is one of the best dividend stocks on our list as the company has been making regular dividend payments to shareholders for the past 140 years. Currently, it offers a quarterly dividend of $0.375 per share for a dividend yield of 4.47%, as of May 5.
Overall, UGI ranks 5th on our list of the best mid-cap dividend aristocrats to buy now. While we acknowledge the potential of UGI as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than UGI but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
