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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Marathon Petroleum Corporation (XNYS:MPC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MPC
Name:
MARATHON PETROLEUM CORPORATION (XNYS:MPC)
Sector:
2.02B
Industry:
Oil & Gas Refining & Marketing
CEO:
Mr. Michael Hennigan
Total Employees:
17,700
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -6.99% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MARATHON PETROLEUM CORPORATION(MPC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS REFINING & MARKETING INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
99.13
One Month Price Target:
$100.07
Six Month Price Target :
$104.76
Likely Price in One Year's Time:
Ticker:
$110.4
Likely Trading Range Today Under (Normal Volatility)
$98.67
Price Upper limit ($) :
$99.88
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$91.93
This week:
$83.03
This month :
$66.93
Other Primary facts
Market Cap:
49.09B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
498.62M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.63%
-27.01%
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:
$132.51
$117.01
$65.75
$81.25
Medium risk (<10%) entry points
Buy Call
Sell Call
$111.96
Buy Put:
Sell Put:
$108.65
$86.26
$89.61
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MPC
Sharpe Ratio:
3.81%
Comparison:
MPC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 13.71% higher than the industry
& ratio is 67.12% higher than the market/S&P 500 average
Average Returns/Yield of
MPC
Daily returns:
0.15%
Weekly returns:
0.73%
Monthly returns:
2.93%
Yearly returns:
39.76%
Comparison of returns:
Average annual returns/yield (last 3 years) is -11.71% below industry average
Classification:
MPC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.76
Statistical test of Returns:
MPC has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.61%
Weekly Volatility:
8.07%
Monthly Volatility:
16.13%
Yearly Volatility:
55.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.92%
Volatility in last five trading days has been -19.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.26%
Weekly VaR:
-16.24%
Monthly VaR:
-32.48%
How Much Can the price of
MPC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$72.32
This translates to price declining to:
$14.87
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MPC is a 129.25% riskier investment compared to the market/S&P 500 & is 96.39% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -12.32% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MPC
Beta in relation to market/S&P 500--1.69
Expected beta in 1 year's time:
0.981
Expected beta in 3 year's time:
1.387
Unlevered (debt free) Beta:
0.855
Beta in relation to Nasdaq (XNAS):
0.921
Beta in relation to all global stocks::
1.048
Beta Comparison & Analysis
Beta of competitors/peers::
1.411
Beta is 19.86% higher than peers
Average Industry Beta:
1.405
Beta is 20.40% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
33.01%
Sustainable growth rate is -75.67% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.204
Alpha is -24.53% below industry average alpha yield
Alpha is 1296% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MPC
Equity cost of capital:
0.147
Equity cost of capital is 15.37% above industry mean WACC
Unlevered (without debt) cost of capital:
7.45%
Before-tax cost of debt:
4.35%
After-tax cost of debt:
3.44%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.44%
WACC is 11.73% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$271.41
Revenue growth rate per share of (3Y):
1.58
Annual revenue growth rate is -31.76% below industry average
EPS:
$16.87
Expected Annual growth rate of EPS (3Y):
-20.37%
Expected future EPS growth rate is 106.79% higher than the Oil & Gas Refining & Marketing industry
Free cash flow (FCF) per share:
$8.22
Balance sheet equity growth per share: 33.19%
Equity growth rate per share is 317.72% higher than the industry
Debt per share
$53.22
EBITDA per share
$31.85
Valuation Analysis Today of
MPC
P/E Ratio:
6.69
P/E Ratio of Competitors/Peers:
16.85
P/E ratio is -60.28% lower than main peers & is -48.92% lower than the industry
Stock price/value with industry average P/E ratio: $221.04
MPC is -55.15% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $27.64
Present value of the expected future dividends only: $16.97
P/S (Price to Sales ratio):
0.37
Price to sales ratio is -76.17% below the industry mean
P/B (Price to book value ratio):
1.58
Price to free cash flow: 12.06
Price to free cash flow ratio is -79.47% lower than the industry
Net income growth rate (3Y):
199.92%
Net income growth rate is -43.28% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.05%
Dividend yeild: 2.34%
Previous Dividend: $0.58
Previous adjusted dividend: $0.58
Previous Dividend: $2.32
Expected next dividend best case: $0.59
Expected next dividend worst case: $0.57
Average dividend payment (long-term): $0.58
Average dividend increase/decrease (growth rate) % per period: 0.94%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-17--$0.58
2021-11-16--$0.58
2021-05-18--$0.58
2022-02-15--$0.58
2021-08-17--$0.58
2021-02-16--$0.58
Dividend growth rate is -109.77% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
110.71%
Net debt to equity ratio:
87.13%
Debt to assets ratio:
29.18%
Net debt to assets ratio:
22.96%
Debt-to-asset ratio is -45.15% below industry average
Ability to repay debt:
Interest coverage ratio:
13.02
Interest coverage ratio is 674.04% more than industry average
Looking forward:
Debt growth rate:
-18.71%
Annual debt growth is -115% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.39%
Analysis of Key Statistics
Correlation of price movement with the market:
0.604
Statistical significance of correlation:
MPC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 16.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.062
Covariance of price movement with the market:
0.13
Kurtosis
10.093
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.327
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MPC
Gross Profit Margin Ratio:
24%
Operating Profit Margin Ratio:
4.29%
Operating profit margin is -448.58% lower than the industry
Net Profit Margin Ratio:
24%
Effective Tax Rate:
11.62%
Effective tax rate is -0.99% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
45.16%
Return on equity (ROE) is -59.93% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.90%
Return on assets (ROA) is 161.31% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.45
Current ratio is -54.45% below industry average
Cash Conversion Cycle (days):
-4.1
Cash conversion cycle is -119.05% below industry average
The remaining useful life of property plant & equipment is: 13.6 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
7.6M
Each employee generates 84% more revenue than industry average revenue per employee
EBITDA generated per employee:
897.3K
Each employee generates 213% more EBITDA than industry average revenue per employee
Profit generated per employee:
611.6K
Each employee generates 308% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
114.0K
Each employee generates -946% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.1M
Each employee generates -946% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MPC
TC Energy Corporation (XNYS:TRP)
KINDER MORGAN, INC. (XNYS:KMI)
PIONEER NATURAL RESOURCES COMPANY (XNYS:PXD)
Schlumberger N.V. (XNYS:SLB)
ENTERPRISE PRODUCTS PARTNERS UNT (XNYS:EPD)
PHILLIPS 66 (XNYS:PSX)
E Automotive Inc. (XTSE:EINC)
CEO
THE WILLIAMS COMPANIES, INC. (XNYS:WMB)
Current Analyst Ratings
Strong buy�29%
Buy�29%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
135.33B
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:
127.32B
8.01B
-
-
2.57B
-
158.00M
2.72B
18.00M
1.22B
3.33B
15.88B
5.80B
10.83B
4.41B
512.00M
10.83B
Statement of Cash Flow
Date:
Period:
805.00M
Differed Income Tax :
- 65000.00K
Stock Based Compensation :
-
Change in Working Capital :
669.00M
Accounts Receivables:
-
Other Working Capital:
2.00M
Other Non-Cash Items:
- 68000.00K
Net Cash Provided by Operating Activities:
2.51B
Investments in PP&E:
- 495000.00K
Net Acquisitions:
-
Purchases of Investments:
- 476000.00K
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
7.15B
3.45B
10.60B
15.66B
9.48B
648.00M
36.39B
38.48B
8.26B
-
5.51B
-
2.32B
54.56B
-
90.95B
19.79B
1.50B
1.69B
-
3.83B
25.12B
26.54B
2.42B
34.53B
-
59.65B
10.00M
13.42B
- 74000.0K
10.62B
March 31, 2022 at 6:00:00 AM
130.04B
23.97B
83.63B
8.96B
28.03B
20.9B
2.46B
222.00M
1.71B
- 1218000.00K
96.00M
- 2846000.00K
- 330000.00K
1.93B
- 2364000.00K
-
1.86B
7.15B
5.29B
2.51B
- 495000.00K
2.02B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
MPC
2023
2024
2025
2026
2027
$110.95
$164.92
$183.67
$204.55
$227.80