Suburban Propane Partners (SPH) versus Marathon Petroleum (MPC) Financial Analysis
Suburban Propane Partners (NYSE: SPH) and Marathon Petroleum (NYSE:MPC) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.
Institutional and Insider Ownership
25.8% of Suburban Propane Partners shares are held by institutional investors. Comparatively, 80.6% of Marathon Petroleum shares are held by institutional investors. 0.6% of Suburban Propane Partners shares are held by company insiders. Comparatively, 1.1% of Marathon Petroleum shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a summary of current ratings for Suburban Propane Partners and Marathon Petroleum, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Suburban Propane Partners||0||1||1||0||2.50|
Suburban Propane Partners presently has a consensus price target of $26.00, indicating a potential upside of 1.01%. Marathon Petroleum has a consensus price target of $69.80, indicating a potential downside of 2.27%. Given Suburban Propane Partners’ higher possible upside, equities research analysts plainly believe Suburban Propane Partners is more favorable than Marathon Petroleum.
This table compares Suburban Propane Partners and Marathon Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Suburban Propane Partners||3.20%||5.81%||1.70%|
Risk & Volatility
Suburban Propane Partners has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.
Earnings & Valuation
This table compares Suburban Propane Partners and Marathon Petroleum’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Suburban Propane Partners||$1.19 billion||1.33||$37.99 million||$0.61||42.20|
|Marathon Petroleum||$63.36 billion||0.55||$1.17 billion||$3.20||22.32|
Marathon Petroleum has higher revenue and earnings than Suburban Propane Partners. Marathon Petroleum is trading at a lower price-to-earnings ratio than Suburban Propane Partners, indicating that it is currently the more affordable of the two stocks.
Suburban Propane Partners pays an annual dividend of $2.40 per share and has a dividend yield of 9.3%. Marathon Petroleum pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Suburban Propane Partners pays out 393.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marathon Petroleum pays out 50.0% of its earnings in the form of a dividend. Suburban Propane Partners has raised its dividend for 7 consecutive years and Marathon Petroleum has raised its dividend for 3 consecutive years. Suburban Propane Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Marathon Petroleum beats Suburban Propane Partners on 11 of the 17 factors compared between the two stocks.
Suburban Propane Partners Company Profile
Suburban Propane Partners, L.P. is a marketer and distributor of a range of products. The Company specializes in the distribution of propane, fuel oil and refined fuels, as well as the marketing of natural gas and electricity in deregulated markets. The Company’s segments include Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. In support of its marketing and distribution operations, the Company installs and services a range of home comfort equipment, particularly in the areas of heating and ventilation. The Company conducts its business through Suburban Propane, L.P., which operates its propane business and assets (the Operating Partnership), and its direct and indirect subsidiaries. As of September 24, 2016, it had sold approximately 414.8 million gallons of propane and 30.9 million gallons of fuel oil and refined fuels to retail customers. The Company owns and operates a propane storage facility in Elk Grove, California.
Marathon Petroleum Company Profile
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.
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