I got to thinking about this month’s “Idea of the Month” as the propane truck was delivering our regular supply of fuel to a chilly Castle Gumshoe — even with prices up a little bit, I didn’t ask him to deliver less. Sure, we might turn down the thermostat a little to save a few cents, but our consumption doesn’t change that much from one winter month to the next (OK, that’s a lie about turning down the thermostat … the lovely Mrs. Gumshoe would set my few remaining hairs on fire just for the warmth if we turned down the heat).

But anyway, heating fuel distribution is a somewhat economically sensitive and commodity-sensitive business insofar as folks turn down the heat when they’re broke, and it’s obviously meteorologically sensitive since cold winters bring higher usage … but it is, regardless, a generally stable, utility-like business with very sticky customer relationships. That means it’s a great way for well-managed companies to generate consistent cash flow. And I’ve had my eye on one particular stock in this sector for quite a while but it was showing signs of not being very settled … until, I think, now. Here’s the story:

Roger Conrad teased us over the Summer with a somewhat risky Canadian company that operates in specialty chemicals and heating fuel distribution, saying that though the dividend had been cut and the CEO was being replaced, the bad news was baked in.

Well, the dividend was subsequently cut again, the new CEO has come on board, they’ve laid out a more stable plan for repaying their high debt and paying out a much more sustainable dividend for the next year (debt repayment is the principal reason for the dividend cut), and the price has now been cut in half from when Conrad teased it, in just a few months.

So NOW I think the bad news is really baked in, maybe even overcooked, and I’d suggest looking at a purchase of Superior Plus, with a sustainable dividend of about 9% and a possible growth catalyst if the economy recovers over the next couple years.

Superior Plus (SPB in Toronto, SUUIF on the pink sheets) is a Canadian company with three significant divisions: Energy Services, which includes heating oil and propane distribution in the Northeastern US and propane distribution across Canada, along with some other utility-like businesses; ...