Marathon Petroleum (NYSE: MPC) and Suncor Energy (NYSE:SU) are both large-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.
This table compares Marathon Petroleum and Suncor Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent recommendations and price targets for Marathon Petroleum and Suncor Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Marathon Petroleum presently has a consensus target price of $69.80, suggesting a potential downside of 2.91%. Suncor Energy has a consensus target price of $44.48, suggesting a potential upside of 20.27%. Given Suncor Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Suncor Energy is more favorable than Marathon Petroleum.
Marathon Petroleum pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Suncor Energy pays an annual dividend of $1.01 per share and has a dividend yield of 2.7%. Marathon Petroleum pays out 49.1% of its earnings in the form of a dividend. Suncor Energy pays out 60.8% 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. Suncor Energy has increased its dividend for 7 consecutive years. Suncor Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
80.6% of Marathon Petroleum shares are owned by institutional investors. Comparatively, 65.6% of Suncor Energy shares are owned by institutional investors. 1.1% of Marathon Petroleum shares are owned by company insiders. Comparatively, 1.0% of Suncor Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Marathon Petroleum and Suncor Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marathon Petroleum||$63.36 billion||0.55||$1.17 billion||$3.26||22.05|
|Suncor Energy||$20.20 billion||3.03||$327.75 million||$1.66||22.28|
Marathon Petroleum has higher revenue and earnings than Suncor Energy. Marathon Petroleum is trading at a lower price-to-earnings ratio than Suncor Energy, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Marathon Petroleum has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500. Comparatively, Suncor Energy has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.
Marathon Petroleum beats Suncor Energy on 9 of the 17 factors compared between the two stocks.
About Marathon Petroleum
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 Suncor Energy
Suncor Energy Inc is a Canada-based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production (E&P), and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its E&P segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Marketing operations. In addition, it explores for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. It transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. It markets third-party petroleum products. The Company also conducts energy trading activities.
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