Reviewing Marathon Petroleum (MPC) & Crestwood Equity Partners (CEQP)

Marathon Petroleum (NYSE: MPC) and Crestwood Equity Partners (NYSE:CEQP) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Insider and Institutional Ownership

80.8% of Marathon Petroleum shares are held by institutional investors. Comparatively, 64.3% of Crestwood Equity Partners shares are held by institutional investors. 1.1% of Marathon Petroleum shares are held by insiders. Comparatively, 36.2% of Crestwood Equity Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Marathon Petroleum has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, Crestwood Equity Partners has a beta of 2.47, indicating that its share price is 147% more volatile than the S&P 500.

Dividends

Marathon Petroleum pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. Crestwood Equity Partners pays an annual dividend of $2.40 per share and has a dividend yield of 8.9%. Marathon Petroleum pays out 50.0% of its earnings in the form of a dividend. Crestwood Equity Partners pays out -85.1% 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. Marathon Petroleum has raised its dividend for 7 consecutive years. Crestwood Equity Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Marathon Petroleum and Crestwood Equity Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marathon Petroleum 0 5 8 0 2.62
Crestwood Equity Partners 0 1 3 0 2.75

Marathon Petroleum presently has a consensus target price of $74.30, suggesting a potential upside of 14.71%. Crestwood Equity Partners has a consensus target price of $30.67, suggesting a potential upside of 13.79%. Given Marathon Petroleum’s higher probable upside, equities research analysts plainly believe Marathon Petroleum is more favorable than Crestwood Equity Partners.

Valuation and Earnings

This table compares Marathon Petroleum and Crestwood Equity Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marathon Petroleum $75.37 billion 0.42 $3.43 billion $3.20 20.24
Crestwood Equity Partners $2.52 billion 0.75 -$216.30 million ($2.82) -9.56

Marathon Petroleum has higher revenue and earnings than Crestwood Equity Partners. Crestwood Equity Partners is trading at a lower price-to-earnings ratio than Marathon Petroleum, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marathon Petroleum and Crestwood Equity Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marathon Petroleum 4.60% 10.04% 4.30%
Crestwood Equity Partners -5.36% -3.34% -1.41%

Summary

Marathon Petroleum beats Crestwood Equity Partners on 11 of the 17 factors compared between the two stocks.

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.

Crestwood Equity Partners Company Profile

Crestwood Equity Partners LP is a holding company and a master limited partnership (MLP). The Company develops, acquires, owns or controls, and operates assets and operations within the energy midstream sector. The Company’s segments include gathering and processing (G&P), which includes its natural gas, crude oil and produced water G&P operations; storage and transportation, which includes its natural gas and crude oil storage and transportation operations, and marketing, supply and logistics, which includes its natural gas liquid (NGL) supply and logistics business, crude oil storage and rail loading facilities and fleet, and salt production business. The Company provides infrastructure solutions to service natural gas and crude oil shale plays across the United States. It owns and operates a portfolio of crude oil and natural gas gathering, processing, storage and transportation assets. Its operating assets are owned by or through its subsidiary, Crestwood Midstream Partners LP.

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