Financial Analysis: Exxon Mobil (XOM) and Marathon Petroleum Corporation (MPC)
Exxon Mobil (NYSE: XOM) and Marathon Petroleum Corporation (NYSE:MPC) are both large-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.
Valuation & Earnings
This table compares Exxon Mobil and Marathon Petroleum Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Exxon Mobil||$215.29 billion||1.63||$27.62 billion||$2.77||29.87|
|Marathon Petroleum Corporation||$60.96 billion||0.47||$4.41 billion||$1.76||32.44|
Exxon Mobil has higher revenue and earnings than Marathon Petroleum Corporation. Exxon Mobil is trading at a lower price-to-earnings ratio than Marathon Petroleum Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Exxon Mobil has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Marathon Petroleum Corporation has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.
This is a summary of current ratings and target prices for Exxon Mobil and Marathon Petroleum Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Marathon Petroleum Corporation||0||5||10||1||2.75|
Exxon Mobil currently has a consensus price target of $85.75, indicating a potential upside of 3.64%. Marathon Petroleum Corporation has a consensus price target of $60.29, indicating a potential upside of 5.58%. Given Marathon Petroleum Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Marathon Petroleum Corporation is more favorable than Exxon Mobil.
This table compares Exxon Mobil and Marathon Petroleum Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Marathon Petroleum Corporation||1.34%||5.52%||2.45%|
Exxon Mobil pays an annual dividend of $3.08 per share and has a dividend yield of 3.7%. Marathon Petroleum Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Exxon Mobil pays out 111.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marathon Petroleum Corporation pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Exxon Mobil has increased its dividend for 34 consecutive years and Marathon Petroleum Corporation has increased its dividend for 6 consecutive years. Exxon Mobil is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
50.7% of Exxon Mobil shares are held by institutional investors. Comparatively, 78.2% of Marathon Petroleum Corporation shares are held by institutional investors. 0.1% of Exxon Mobil shares are held by insiders. Comparatively, 1.1% of Marathon Petroleum Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Exxon Mobil beats Marathon Petroleum Corporation on 9 of the 17 factors compared between the two stocks.
Exxon Mobil Company Profile
Exxon Mobil Corporation is engaged in energy business. The Company is engaged in the exploration, production, transportation and sale of crude oil and natural gas, and the manufacture, transportation and sale of petroleum products. The Company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and a range of specialty products. The Company’s segments include Upstream, Downstream, Chemical, and Corporate and Financing. The Upstream segment operates to explore for and produce crude oil and natural gas. The Downstream operates to manufacture and sell petroleum products. The Chemical segment operates to manufacture and sell petrochemicals. The Company has exploration and development activities in projects located in the United States, Canada/South America, Europe, Africa, Asia and Australia/Oceania.
Marathon Petroleum Corporation 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.
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