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

Volatility and Risk

Murphy USA has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, TravelCenters of America has a beta of 2.43, suggesting that its stock price is 143% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Murphy USA $11.59 billion 0.23 $221.49 million $4.46 16.92
TravelCenters of America $5.51 billion 0.03 -$1.92 million $0.59 8.05

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.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Murphy USA 1 3 1 0 2.00
TravelCenters of America 1 0 2 0 2.33

Murphy USA currently has a consensus price target of $84.50, indicating a potential upside of 11.99%. TravelCenters of America has a consensus price target of $8.17, indicating a potential upside of 71.93%. Given TravelCenters of America’s stronger consensus rating and higher possible upside, analysts clearly believe TravelCenters of America is more favorable than Murphy USA.

Profitability

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

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

Institutional and Insider Ownership

99.9% of Murphy USA shares are held by institutional investors. Comparatively, 40.3% of TravelCenters of America shares are held by institutional investors. 7.3% of Murphy USA shares are held by company insiders. Comparatively, 8.5% of TravelCenters of America shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

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

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.

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.

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