Marathon Petroleum (NYSE:MPC) and BP Prudhoe Bay Royalty Trust (NYSE:BPT) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.
Risk and Volatility
Marathon Petroleum has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, BP Prudhoe Bay Royalty Trust has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500.
79.3% of Marathon Petroleum shares are held by institutional investors. Comparatively, 4.1% of BP Prudhoe Bay Royalty Trust shares are held by institutional investors. 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.
Marathon Petroleum pays an annual dividend of $2.12 per share and has a dividend yield of 3.5%. BP Prudhoe Bay Royalty Trust pays an annual dividend of $1.38 per share and has a dividend yield of 6.3%. Marathon Petroleum pays out 31.3% of its earnings in the form of a dividend. Marathon Petroleum has increased its dividend for 8 consecutive years and BP Prudhoe Bay Royalty Trust has increased its dividend for 2 consecutive years.
Earnings and Valuation
This table compares Marathon Petroleum and BP Prudhoe Bay Royalty Trust’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marathon Petroleum||$97.10 billion||0.41||$2.78 billion||$6.78||8.82|
|BP Prudhoe Bay Royalty Trust||$114.37 million||4.13||$113.28 million||N/A||N/A|
Marathon Petroleum has higher revenue and earnings than BP Prudhoe Bay Royalty Trust.
This table compares Marathon Petroleum and BP Prudhoe Bay Royalty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|BP Prudhoe Bay Royalty Trust||99.03%||16,432.79%||11,244.78%|
This is a breakdown of current ratings and recommmendations for Marathon Petroleum and BP Prudhoe Bay Royalty Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|BP Prudhoe Bay Royalty Trust||0||0||0||0||N/A|
Marathon Petroleum currently has a consensus price target of $91.02, suggesting a potential upside of 52.17%. Given Marathon Petroleum’s higher probable upside, research analysts clearly believe Marathon Petroleum is more favorable than BP Prudhoe Bay Royalty Trust.
Marathon Petroleum beats BP Prudhoe Bay Royalty Trust on 10 of the 16 factors compared between the two stocks.
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, Retail, and Midstream. The Refining & Marketing segment refines crude oil and other feed stocks at its 16 refineries in the West Coast, Gulf Coast, and Mid-Continent regions of the United States; and purchases refined products and ethanol for resale. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures aromatics, propane, propylene, and sulfur. It sells refined products wholesale marketing customers domestically and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets. The Retail segment sells transportation fuels and convenience products in the retail market through company-owned and operated convenience stores, primarily under the Speedway brand; and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats and barges; and gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. The company also exports its refined products. As of December 31, 2018, it owned, leased, and had ownership interests in approximately 16,600 miles of crude oil and refined product pipelines, as well as owned and operated 3,920 convenience stores; and had 6,813 retail outlets operated by independent entrepreneurs in 35 states of the United States, the District of Columbia, and Mexico. The company was founded in 1887 and is headquartered in Findlay, Ohio.
About BP Prudhoe Bay Royalty Trust
BP Prudhoe Bay Royalty Trust operates as a grantor trust in the United States. The company holds overriding royalty interest comprising a non-operational interest in minerals in the Prudhoe Bay oil field located on the North Slope of Alaska. The Prudhoe Bay field extends approximately 12 miles by 27 miles and contains approximately 150,000 gross productive acres. As of December 31, 2018, its estimated proved reserves were 15.772 million barrels of oil and condensate of which 15.638 million barrels are proved developed reserves; and 0.134 million barrels are proved undeveloped reserves. BP Prudhoe Bay Royalty Trust was founded in 1989 and is based in Houston, Texas.
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