TravelCenters of America (NASDAQ: TA) and Murphy USA (NYSE:MUSA) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Insider and Institutional Ownership

34.1% of TravelCenters of America shares are owned by institutional investors. Comparatively, 95.5% of Murphy USA shares are owned by institutional investors. 8.5% of TravelCenters of America shares are owned by company insiders. Comparatively, 7.3% of Murphy USA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

TravelCenters of America has a beta of 2.36, meaning that its stock price is 136% more volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for TravelCenters of America and Murphy USA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TravelCenters of America 0 1 2 0 2.67
Murphy USA 1 3 1 0 2.00

TravelCenters of America presently has a consensus price target of $8.17, indicating a potential upside of 85.61%. Murphy USA has a consensus price target of $84.50, indicating a potential upside of 5.36%. Given TravelCenters of America’s stronger consensus rating and higher probable upside, equities analysts plainly believe TravelCenters of America is more favorable than Murphy USA.

Profitability

This table compares TravelCenters of America and Murphy USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TravelCenters of America 0.40% -1.79% -0.59%
Murphy USA 1.31% 24.19% 7.64%

Valuation and Earnings

This table compares TravelCenters of America and Murphy USA’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TravelCenters of America $5.51 billion 0.03 -$1.92 million $0.59 7.46
Murphy USA $11.59 billion 0.24 $221.49 million $4.47 17.94

Murphy USA has higher revenue and earnings than TravelCenters of America. TravelCenters of America is trading at a lower price-to-earnings ratio than Murphy USA, indicating that it is currently the more affordable of the two stocks.

Summary

Murphy USA beats TravelCenters of America on 8 of the 13 factors compared between the two stocks.

TravelCenters of America Company Profile

TravelCenters of America LLC (TravelCenters) operates and franchises travel centers and convenience store and restaurant locations. The Company’s segments include travel centers, convenience stores, and corporate and other. The Company offers a range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as truck repair and maintenance services, full service restaurants, quick service restaurants (QSRs), travel/convenience stores and various customer amenities. Its customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. As of December 31, 2016, the Company’s business included 255 travel centers in 43 states in the United States primarily along the United States interstate highway system, and the province of Ontario, Canada. As of December 31, 2016, the Company’s business included 233 convenience stores in 11 states in the United States.

Murphy USA Company Profile

Murphy USA Inc. is engaged in the marketing of retail motor fuel products and merchandise through a chain of retail stores. The Company operates through the Marketing segment. The Marketing segment includes its retail marketing sites and product supply, and wholesale assets. As of December 31, 2016, its retail stores were located in 26 states, primarily in the Southwest, Southeast and Midwest the United States. Out of the total 1,401 stores, 1,152 were branded Murphy USA and 249 were Murphy Express locations, as of December 31, 2016. Its retail stores under the brand name Murphy USA participate in the Walmart discount program. The Walmart discount program offers a cents-off per gallon purchased for fuel when using specific payment methods as decided by Walmart and the Company. Its business also includes product supply and wholesale assets, including product distribution terminals and pipeline positions.

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