Marathon Petroleum Corporation (MPC) & PBF Energy (PBF) Financial Analysis
Marathon Petroleum Corporation (NYSE: MPC) and PBF Energy (NYSE:PBF) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.
Marathon Petroleum Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. PBF Energy pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. Marathon Petroleum Corporation pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PBF Energy pays out -363.6% of its earnings in the form of a dividend. PBF Energy has increased its dividend for 6 consecutive years. PBF Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Marathon Petroleum Corporation has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, PBF Energy has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Marathon Petroleum Corporation and PBF Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Marathon Petroleum Corporation||0||5||10||1||2.75|
Marathon Petroleum Corporation presently has a consensus target price of $60.29, suggesting a potential upside of 6.23%. PBF Energy has a consensus target price of $25.11, suggesting a potential downside of 8.89%. Given Marathon Petroleum Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Marathon Petroleum Corporation is more favorable than PBF Energy.
This table compares Marathon Petroleum Corporation and PBF Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Marathon Petroleum Corporation||1.34%||5.52%||2.45%|
Insider & Institutional Ownership
78.2% of Marathon Petroleum Corporation shares are owned by institutional investors. 1.1% of Marathon Petroleum Corporation shares are owned by company insiders. Comparatively, 2.6% of PBF Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Marathon Petroleum Corporation and PBF Energy’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Marathon Petroleum Corporation||$60.96 billion||0.47||$4.41 billion||$1.76||32.24|
|PBF Energy||$19.03 billion||0.16||$189.02 million||($0.33)||-83.52|
Marathon Petroleum Corporation has higher revenue and earnings than PBF Energy. PBF Energy is trading at a lower price-to-earnings ratio than Marathon Petroleum Corporation, indicating that it is currently the more affordable of the two stocks.
Marathon Petroleum Corporation beats PBF Energy on 13 of the 17 factors compared between the two stocks.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation is engaged in refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. The Company operates through three segments: Refining & Marketing; Speedway; and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at the Company’s seven refineries in the Gulf Coast and Midwest regions of the United States. Its Speedway segment sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States. The Company’s Midstream is engaged in the operations of MPLX LP and certain other related operations. It gathers, processes and transports natural gas, natural gas liquids (NGLs), crude oil and refined products. MPLX is a limited partnership which owns, operates, develops and acquires midstream energy infrastructure assets.
About PBF Energy
PBF Energy Inc. (PBF Energy) is a holding company. The Company is an independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company operates through two segments: Refining and Logistics. It sells its products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States and Canada, and ships products to other international destinations. As of December 31, 2016, it owned and operated five domestic oil refineries and related assets. As of December 31, 2016, its refineries had a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (bpd) and a weighted-average Nelson Complexity Index of approximately 12.2. As of December 31, 2016, the Company owned and operated five refineries providing geographic and market diversity.
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