Critical Comparison: Marathon Petroleum (MPC) versus Statoil (STO)

Statoil (NYSE: STO) and Marathon Petroleum (NYSE:MPC) are both large-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Profitability

This table compares Statoil and Marathon Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil 7.34% 12.32% 4.36%
Marathon Petroleum 4.45% 10.05% 4.15%

Dividends

Statoil pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Marathon Petroleum pays an annual dividend of $1.84 per share and has a dividend yield of 2.6%. Statoil pays out 23.2% of its earnings in the form of a dividend. Marathon Petroleum pays out 48.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Statoil has increased its dividend for 5 consecutive years and Marathon Petroleum has increased its dividend for 7 consecutive years. Marathon Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Statoil has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Insider & Institutional Ownership

5.0% of Statoil shares are owned by institutional investors. Comparatively, 79.4% of Marathon Petroleum shares are owned by institutional investors. 1.1% of Marathon Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Statoil and Marathon Petroleum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Statoil $61.19 billion 1.47 $4.59 billion $1.38 19.67
Marathon Petroleum $75.37 billion 0.43 $3.43 billion $3.80 18.61

Statoil has higher earnings, but lower revenue than Marathon Petroleum. Marathon Petroleum is trading at a lower price-to-earnings ratio than Statoil, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Statoil and Marathon Petroleum, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil 3 10 2 0 1.93
Marathon Petroleum 0 3 14 0 2.82

Statoil presently has a consensus target price of $21.50, indicating a potential downside of 20.78%. Marathon Petroleum has a consensus target price of $83.80, indicating a potential upside of 18.53%. Given Marathon Petroleum’s stronger consensus rating and higher probable upside, analysts clearly believe Marathon Petroleum is more favorable than Statoil.

Summary

Marathon Petroleum beats Statoil on 10 of the 17 factors compared between the two stocks.

About Statoil

Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development & Production Norway; Development & Production USA; Development & Production International; Marketing, Midstream & Processing; New Energy Solutions; Technology, Projects & Drilling; Exploration; and Global Strategy & Business Development segments. It also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas; markets and trades electricity and emission rights; and operates refineries, processing and power plants, and terminals. In addition, the company develops wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2017, it had proved oil and gas reserves of 5,367 million barrels of oil equivalent. The company was formerly known as StatoilHydro ASA and changed its name to Statoil ASA in November 2009. Statoil ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About Marathon Petroleum

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, marketing, retailing, and transporting petroleum products primarily in the United States. It operates through three segments: Refining & Marketing, Speedway, and Midstream. It refines crude oil and other feed stocks at its six refineries in the Gulf Coast and Midwest regions of the United States; and purchases refined products and ethanol for resale. Its refined products include gasoline, distillates, propane, feed stocks and special products, heavy fuel oil, and asphalt. It also sells transportation fuels and convenience products in the retail market through Speedway convenience stores; gathers, processes, and transports natural gas; gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs); and transports and stores crude oil and refined products. It markets its refined products to resellers, consumers, independent retailers, wholesale customers, its Marathon brand jobbers and Speedway brand convenience stores, airlines, transportation companies, and utilities. It also exports its refined products. As of December 31, 2017, it owned and operated 18 asphalt terminals and 61 light products terminals; 2,744 convenience stores in 21 states; 289 transport trucks and 296 trailers; 1,999 leased and 19 owned railcars; and owned/leased and operated 1,613 miles of common carrier crude oil and 2,360 miles of common carrier products pipelines, as well as had 5,617 retail outlets in 20 states and the District of Columbia, and interests in 2,194 miles of crude oil and 1,917 miles of products pipelines. It also owns and operates 228 miles of private products pipelines; has ownership interests in 739 miles of common carrier crude oil pipeline and 1,741 miles of products pipelines; and distributes refined products through approximately 130 light products and 2 asphalt third-party terminals. The company was incorporated in 2009 and is headquartered in Findlay, Ohio.

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