Critical Analysis: Ultrapar Participacoes (UGP) vs. Murphy USA (MUSA)
Ultrapar Participacoes (NYSE: UGP) and Murphy USA (NYSE:MUSA) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.
This is a summary of recent ratings and target prices for Ultrapar Participacoes and Murphy USA, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Murphy USA has a consensus price target of $83.33, indicating a potential upside of 20.15%. Given Murphy USA’s stronger consensus rating and higher probable upside, analysts clearly believe Murphy USA is more favorable than Ultrapar Participacoes.
Institutional & Insider Ownership
4.3% of Ultrapar Participacoes shares are held by institutional investors. Comparatively, 97.9% of Murphy USA shares are held by institutional investors. 7.3% of Murphy USA shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Ultrapar Participacoes and Murphy USA’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ultrapar Participacoes||$24.48 billion||0.50||$1.28 billion||$0.80||27.90|
|Murphy USA||$10.32 billion||0.24||$367.97 million||$3.73||18.60|
Ultrapar Participacoes has higher revenue and earnings than Murphy USA. Murphy USA is trading at a lower price-to-earnings ratio than Ultrapar Participacoes, indicating that it is currently the more affordable of the two stocks.
Ultrapar Participacoes pays an annual dividend of $0.52 per share and has a dividend yield of 2.3%. Murphy USA does not pay a dividend. Ultrapar Participacoes pays out 65.0% of its earnings in the form of a dividend.
Volatility & Risk
Ultrapar Participacoes has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.
This table compares Ultrapar Participacoes and Murphy USA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Murphy USA beats Ultrapar Participacoes on 9 of the 16 factors compared between the two stocks.
Ultrapar Participacoes Company Profile
Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others.
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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