Discover how to buy propane stocks as well as considerations when investing in the propane industry in Canada. Plus, three popular propane stocks to look into.
When the market is in turmoil, many investors turn to commodities. One lesser-known commodity is propane, sometimes called liquid petroleum gas (LPG). Here’s what you need to know about investing in propane stocks, why the price of LPG and propane can suddenly rise and whether it’s better to buy oil, gas or propane.
How to invest in propane stocks
Choose a stock trading platform. Look at fees, account requirement and which exchanges and investment types are supported.
Open your account. You’ll likely need ID, payment information and your Social Insurance Number (SIN).
Confirm your payment details. Payment methods may vary between platforms but could include bank transfer, debit or credit.
Search for stocks and ETFs. Look up stocks or ETFs by name or ticker symbol (i.e. SPB or SPH).
Research the stocks or ETFs you want to buy. Most platforms provide information on past performance, company financials and other metrics to help you between investments.
Buy. Track how your stock or ETF performs with an eye on how companies perform in the long run. If the price rises, you may want to sell to earn a profit on your investment.
Our selection of top picks is based on the same criteria as our annual Stock Trading Platform Awards. This is updated yearly to reflect changes in the market.
"Best for" picks are those we've evaluated to be best for specific product features or categories – you can read our full methodology here. If we show a "Promoted" pick, it's been chosen from among our commercial partners and is based on factors that include special features or offers, and the commission we receive.
This isn't an exhaustive list of all the trading platforms out there. What's best for you depends on your own investing strategy, budget and financial goals.
Invest in propane stocks
Investing in propane stocks means you’ll buy shares in companies that produce and sell propane and LPG.
Pros
Avoid fund management fees when you own individual stocks directly
Control your investment. Buy and sell stocks when you want.
Choose stocks according to your own investment goals and personal values
Cons
Individual stock investments provide less exposure to the market than funds
Individual stock investments provide less protection from market fluctuations than funds
Exchange traded funds (ETFs) can be a fantastic way to diversify your investment by spreading it across many different companies. As of the time of writing, there aren’t any ETFs that focus solely on propane stocks. You’ll need to look at energy-focused ETFs that invest in a range of fuels including oil, petroleum, propane and renewable energy.
Pros
Get exposure to a wide range of energy stocks
Lower fees than mutual funds
No need to research and pick individual propane stocks
Cons
Hard to invest solely in propane as most energy companies deal in a range of carbon fuels
Less control over your investment than individual stocks investments
If you need propane or LPG to heat your home, then it may be possible to stock up on propane in case prices continue to rise.
Pros
You may save money if propane prices rise
Predictable energy costs. Avoid being surprised by unexpected jumps in propane prices.
Cons
Limited by the amount of propane you can physically store
If prices fall, you’ve overpaid for propane
3 propane stocks to consider
Superior Plus Corp. (SPB.TSX)
Superior Plus Corp. is an energy distribution business that operates through 2 segments: US Propane Distribution and Canadian Propane Distribution.
The company distributes and sells propane, heating oil, other liquid fuels as well as propane-consuming equipment. Additionally, it rents, installs, maintains and repairs propane and heating oil equipment.
UGI Corporation distributes, stores, transports and markets energy products and related services in the United States and internationally. The company operates through 4 segments: AmeriGas Propane, UGI International, Midstream & Marketing and UGI Utilities.
UGI distributes and sells propane and liquefied petroleum gases (LPG) to residential, commercial and industrial customers. It also operates power-generating stations and provides logistics, storage and other services to third-party LPG distributors.
Headquartered in Texas, Energy Transfer LP owns and operates natural gas transportation pipelines, natural gas storage facilities and processing plants. It also sells natural gas to industrial end-users, electric utilities companies, independent power plants and local distribution companies.
Additionally, Energy Transfer manages coal and natural resources properties, sells standing timber and leases coal-related infrastructure facilities.
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score the better the platform - simple.
If you’re looking to invest in a clean source of fuel, then consider the advantages that propane has over gas, petroleum and diesel:
Propane is cleaner than gas, petrol or diesel as it produces less carbon dioxide when burned.
Propane isn’t harmful when inhaled and doesn’t emit chemical waste like sulphur dioxide, nitrogen oxides or methane.
Propane is not harmful to the soil, groundwater, freshwater or sea water as it evaporates into a nontoxic vapour.
It’s hard to argue that propane is a truly “green” fuel, because it’s produced as a byproduct of processing gas and petroleum. Renewable energy sources like solar power, wind power and hydropower are considerably more environmentally friendly.
What is LPG?
LPG (liquid petroleum gas) is a byproduct of processing natural gas and refining oil. Propane is sometimes called LPG. However, LPG is actually an umbrella term for several gases including propane, butane, propylene, butadiene, butylene and isobutylene.
Propane, the main type of LPG, is normally compressed and stored as a liquid. It’s nontoxic, virtually odourless and colourless, but an odour can be added to make it easier to detect. Propane is similar to butane but can boil and very low temperatures and is therefore used more often outdoors, whereas butane is often used indoors.
Propane is commonly used to heat homes in rural areas where it’s not possible to connect to gas lines. It’s also used in industrial processing and as fuel for machines and commercial vehicles. When used as fuel for transportation, it’s sometimes called propane autogas.
What causes the price of LPG and propane to rise and fall?
Many factors affect the cost of energy. But one of the main factors contributing to propane price increases is the rising cost of oil and gas. Because propane is a byproduct of oil and gas manufacturing, when oil and gas prices increase, so does the cost of propane.
Generally, higher supply drives down the price of resources. So, LPG and propane prices could go down if new resources are discovered, energy technology advances, laws benefitting oil and gas producers are passed or political tensions ease between countries that import and export energy resources.
What are LPG, propane and butane used for?
We’ve all occasionally heard about petroleum and oil prices rising, but propane isn’t usually in the news. It’s actually the 3rd most common transportation fuel in the world after gas and diesel. It also has many other uses including:
Making plastic
Running farm machinery including irrigation engines
Powering forklift trucks
Fueling fleet vehicles and buses (in this context, it’s called autogas)
Cutting metal and producing other materials
Heating homes and caravans
Powering electrical appliances
Heating water
Powering gas fireplaces and patio heaters
Bottom line
When the stock market is volatile, investors tend to see commodities like propane stocks as a safe investment. But the energy sector can be volatile, which makes it difficult to predict how propane stock prices will change.
Carefully research any investment before you buy in, and compare brokers to find one that offers the type of investments you want with fees and account requirements that work for you.
Frequently asked questions about propane stocks
Yes. Any money earned on investments—including propane stocks—is considered investment income that must be reported on your tax return. In Canada, you’re only taxed on half of your investment income. The tax rate depends on your total income from all sources in a given tax year (federal and provincial/territorial tax rates differ). Learn more in our stock trading tax guide.
When the supply of oil changes, which could happen due to political events, environmental movements, technological advancements and more, the price of oil and related commodities will also change. But it can be tough to predict how and when these changes will occur.
Diversifying your energy investments can help protect against unfavourable stock price movements. One way to diversify is to invest in exchange traded funds (ETF) that track the energy sector by holding stocks in many companies that deal in oil, gas and propane.
Yes. Propane is in high demand, because it’s used in many industrial applications including plastic production. It’s likely that the demand for propane will continue, and maybe even increase, in the future as cleaner fuels like LPG and propane become more widely used to power vehicles.
Propane is non-toxic and contains less carbon than other fossil fuels like coal and natural gas, so it burns more cleanly and is less harmful to the environment. In the United States, propane has been recognized as an alternative fuel. The US Department of Energy has stated that propane does not pose a threat to soil, surface water or groundwater if spilled or leaked from a vehicle.
That being said, other sources of energy like solar power, hydropower and wind power are cleaner (assuming fossil fuels aren’t used to power any mechanisms related to generating these types of energy).
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Stacie Hurst is an editor at Finder, specializing in loans, banking, investing and money transfers. She has a Bachelor of Arts in Psychology and Writing, and she has completed FP Canada Institute's Financial Management Course. Before working in the publishing industry, Stacie completed one year of law school in the United States. When not working, she can usually be found watching K-dramas or playing games with her friends and family. See full bio
Stacie's expertise
Stacie has written 303 Finder guides across topics including:
Questrade is a leader among Canadian discount brokerages, but is it right for you? Compare fees, features and alternatives here.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
