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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Marathon Oil Corporation (XNYS:MRO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MRO
Name:
MARATHON OIL CORPORATION (XNYS:MRO)
Sector:
735.00M
Industry:
Oil & Gas E&P
CEO:
Mr. Lee Tillman
Total Employees:
1,531
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 39.49% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MARATHON OIL CORPORATION(MRO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS E&P INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
25.71
One Month Price Target:
$26.07
Six Month Price Target :
$27.85
Likely Price in One Year's Time:
Ticker:
$29.99
Likely Trading Range Today Under (Normal Volatility)
$25.57
Price Upper limit ($) :
$25.96
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.38
This week:
$20.5
This month :
$15.3
Other Primary facts
Market Cap:
17.29B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
677.58M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
23.24%
-46.85%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$36.50
$31.47
$14.92
$19.95
Medium risk (<10%) entry points
Buy Call
Sell Call
$29.84
Buy Put:
Sell Put:
$28.76
$21.57
$22.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MRO
Sharpe Ratio:
4.49%
Comparison:
MRO, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -2.20% lower than the industry
& ratio is 97.20% higher than the market/S&P 500 average
Average Returns/Yield of
MRO
Daily returns:
0.21%
Weekly returns:
1.06%
Monthly returns:
4.23%
Yearly returns:
61.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is -17.30% below industry average
Classification:
MRO, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.3
Statistical test of Returns:
MRO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.51%
Weekly Volatility:
10.09%
Monthly Volatility:
20.18%
Yearly Volatility:
69.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.34%
Volatility in last five trading days has been -25.98% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.05%
Weekly VaR:
-20.25%
Monthly VaR:
-40.49%
How Much Can the price of
MRO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-33%
Worst case (decline):
>85%
This translates to price declining to:
$17.13
This translates to price declining to:
$3.86
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MRO is a 185.78% riskier investment compared to the market/S&P 500 & is 144.83% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.48% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MRO
Beta in relation to market/S&P 500--2.48
Expected beta in 1 year's time:
1.199
Expected beta in 3 year's time:
1.696
Unlevered (debt free) Beta:
1.72
Beta in relation to Nasdaq (XNAS):
0.877
Beta in relation to all global stocks::
0.915
Beta Comparison & Analysis
Beta of competitors/peers::
2.234
Beta is 10.86% higher than peers
Average Industry Beta:
2.012
Beta is 23.05% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.307
Alpha is -31.03% below industry average alpha yield
Alpha is 1953% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MRO
Equity cost of capital:
0.201
Equity cost of capital is 18.76% above industry mean WACC
Unlevered (without debt) cost of capital:
13.97%
Before-tax cost of debt:
-0.55%
After-tax cost of debt:
-0.43%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-0.43%
WACC is 10.80% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.13
Revenue growth rate per share of (3Y):
1.53
Annual revenue growth rate is -101.73% below industry average
EPS:
$2.87
Expected Annual growth rate of EPS (3Y):
25.78%
Expected future EPS growth rate is -20.01% lower than the Oil & Gas E&P industry
Free cash flow (FCF) per share:
$3.43
Balance sheet equity growth per share: -13.18%
Equity growth rate per share is -110.56% lower than the industry
Debt per share
$5.77
EBITDA per share
$5.39
Valuation Analysis Today of
MRO
P/E Ratio:
6.1
P/E Ratio of Competitors/Peers:
24.8
P/E ratio is -75.42% lower than main peers & is -85.53% lower than the industry
Stock price/value with industry average P/E ratio: $120.86
MRO is -78.73% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $18.11
Present value of the expected future dividends only: $2.47
P/S (Price to Sales ratio):
2.82
Price to sales ratio is -42.79% below the industry mean
P/B (Price to book value ratio):
1.53
Price to free cash flow: 7.49
Price to free cash flow ratio is -39.59% lower than the industry
Net income growth rate (3Y):
-10.18%
Net income growth rate is -101.43% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 2.42%
Dividend yeild: 1.01%
Previous Dividend: $0.08
Previous adjusted dividend: $0.08
Previous Dividend: $0.26
Expected next dividend best case: $0.10
Expected next dividend worst case: $0.06
Average dividend payment (long-term): $0.05
Average dividend increase/decrease (growth rate) % per period: 8.66%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-17--$0.08
2021-11-16--$0.06
2021-05-18--$0.04
2022-02-15--$0.07
2021-08-17--$0.05
2021-02-16--$0.03
Dividend growth rate is -79.07% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
34.38%
Net debt to equity ratio:
29.32%
Debt to assets ratio:
21.73%
Net debt to assets ratio:
18.54%
Debt-to-asset ratio is -59.19% below industry average
Ability to repay debt:
Interest coverage ratio:
-166.14
Interest coverage ratio is -2194.74% less than industry average
Looking forward:
Debt growth rate:
-34.09%
Annual debt growth is -102% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.464
Statistical significance of correlation:
MRO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.394
Stock price is 17.63% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.394
Correlation of price movement with Nasdaq (^IXIC):
0.067
Covariance of price movement with the market:
0.176
Kurtosis
18.912
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.064
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
MRO
Gross Profit Margin Ratio:
181%
Operating Profit Margin Ratio:
32.27%
Operating profit margin is -2445.76% lower than the industry
Net Profit Margin Ratio:
181%
Effective Tax Rate:
-27.85%
Effective tax rate is -240.71% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.94%
Return on equity (ROE) is 122.52% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.97%
Return on assets (ROA) is 420.80% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.1
Current ratio is -44.76% below industry average
Cash Conversion Cycle (days):
-161.5
Cash conversion cycle is -328.18% below industry average
The remaining useful life of property plant & equipment is: 7.3 years
Stock based compensation to net income ratio:
0.42%
In-depth Efficiency Analysis
Revenue generated per employee:
4.0M
Each employee generates -49% less revenue than industry average revenue per employee
EBITDA generated per employee:
2.4M
Each employee generates -2% less EBITDA than industry average revenue per employee
Profit generated per employee:
1.4M
Each employee generates 236% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
480.1K
Each employee generates -621% less free cash flow than industry average revenue per employee
Assets/Capital per employee
10.3M
Each employee generates -621% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MRO
Tenaris SA (XNYS:TS)
TARGA RESOURCES CORP. (XNYS:TRGP)
PEMBINA PIPELINE CORPORATION (XNYS:PBA)
SASOL LIMITED (XNYS:SSL)
CONTINENTAL RESOURCES, INC. (XNYS:CLR)
MAGELLAN MIDSTREAM PARTNERS UNT (XNYS:MMP)
OVINTIV INC. (XNYS:OVV)
TEXAS PACIFIC LAND CORPORATION (XNYS:TPL)
WESTERN GAS EQUITY PARTNERS COM UNT (XNYS:WES)
Current Analyst Ratings
Strong buy�17%
Buy�33%
Hold�54%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.19B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.32B
2.87B
-
275.00M
275.00M
-
486.00M
761.00M
-
- 22000.00K
1.99B
3.66B
2.00B
2.15B
1.68B
- 469000.00K
2.15B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
- 548000.00K
Stock Based Compensation :
9.00M
Change in Working Capital :
- 213000.00K
Accounts Receivables:
-
Other Working Capital:
- 5000.00K
Other Non-Cash Items:
515.00M
Net Cash Provided by Operating Activities:
1.07B
Investments in PP&E:
- 332000.00K
Net Acquisitions:
7.00M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
681.00M
-
681.00M
1.44B
78.00M
28.00M
2.23B
14.42B
-
-
522.00M
554.00M
253.00M
15.75B
-
17.98B
1.30B
106.00M
169.00M
-
616.00M
2.02B
3.91B
542.00M
4.59B
-
6.62B
937.00M
8.52B
90.0M
1.82B
March 31, 2022 at 6:00:00 AM
4.08B
11.37B
17.98B
-
4.01B
3.3B
-
2.00M
- 323000.00K
-
-
- 613000.00K
- 52000.00K
22.00M
- 643000.00K
-
101.00M
681.00M
580.00M
1.07B
- 332000.00K
735.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
MRO
2023
2024
2025
2026
2027
$30.14
$54.38
$63.43
$73.99
$86.30