MARATHON OIL NYSE-MRO RECENT
PRICE 12.85 P/ERATIO 17.8(Trailing:
Median: NMF) P/E RATIO 0.95 YLD 1.6%
15.5 RELATIVE DIV’D VALUE
LINE
TIMELINESS 4 Lowered 11/15/19 High:
Low:
35.0
19.1
35.5
23.2
38.2
29.5
41.9
24.3
31.5
12.1
19.3
6.5
18.3
10.5
24.2
12.6
18.9
11.1
Target Price Range
2022 2023 2024
SAFETY 3 Lowered 2/7/14 LEGENDS
5.0 x ″Cash Flow″ p sh 64
TECHNICAL 4 Raised 1/24/20 . . . . Relative Price Strength
2-for-1 split 6/07 48
BETA 2.00 (1.00 = Market) Options: Yes 40
Shaded area indicates recession
18-Month Target Price Range 32
Low-High Midpoint (% to Mid) 24
20
$10-$24 $17 (30%) 16
2022-24 PROJECTIONS 12
Ann’l Total
Price Gain Return 8
High 35 (+170%) 29% 6
Low 25 (+95%) 19%
% TOT. RETURN 12/19
Institutional Decisions THIS VL ARITH.*
1Q2019 2Q2019 3Q2019 STOCK INDEX
Percent 45 1 yr. -3.9 23.6
to Buy 333 278 241 shares 30
to Sell 287 332 340 3 yr. -18.4 26.5
traded 15
Hld’s(000) 672649 674348 662893 5 yr. -47.7 42.2
On July 1, 2011, Marathon Oil Corporation 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 © VALUE LINE PUB. LLC 22-24
spun off its Refining, Marketing, and Trans- -- - - 21.71 22.94 20.80 16.07 8.12 4.76 5.14 6.89 6.55 7.00 Revenues per sh 8.70
portation business to its shareholders. Each -- -- 5.64 5.74 6.29 5.67 3.04 1.99 2.53 3.77 3.90 4.20 ‘‘Cash Flow’’ per sh 5.70
shareholder received one share of Marathon -- -- 2.39 2.23 2.24 1.42 d1.33 d.85 d.27 .76 .85 1.00 Earnings per sh A 2.10
Petroleum for every two shares of Marathon -- -- .30 .68 .72 .80 .68 .20 .20 .20 .20 .20 Div’ds Decl’d per sh B■† .40
Oil common stock held on the record date of -- -- 4.68 6.99 6.84 7.68 5.13 1.47 2.32 3.36 3.20 3.20 Cap’l Spending per sh 3.25
June 27, 2011. Marathon Petroleum is now -- - - 24.36 25.86 27.75 31.14 27.40 20.71 13.77 14.81 16.00 16.60 Book Value per sh 18.30
an independent publicly traded company, -- - - 704.00 707.00 697.00 675.00 677.00 847.00 850.00 819.00 795.00 780.00 Common Shs Outst’g C 775.00
and is listed on the NYSE (ticker MPC). -- -- 11.3 13.1 15.5 25.0 -- -- -- 24.6 16.7 Avg Ann’l P/E Ratio 14.0
-- -- .71 .83 .87 1.32 -- -- -- 1.33 .91 Relative P/E Ratio .75
CAPITAL STRUCTURE as of 9/30/19 -- -- 1.1% 2.3% 2.1% 2.3% 3.0% 1.5% 1.4% 1.1% 1.4% Avg Ann’l Div’d Yield 1.2%
Total Debt $5503 mill. Due in 5 Yrs $1836 mill. -- - - 15282 16221 14501 10846 5499.0 4031.0 4373.0 5640.0 5195 5455 Revenues ($mill) 6750
LT Debt $4903 mill. LT Interest $230 mill. -- - - 46.3% 59.9% 57.8% 46.5% 24.1% 39.2% 58.1% 63.6% 66.0% 66.2% Operating Margin 70.3%
(Total interest coverage: 4.4x) (29% of Cap’l)
-- - - 2266.0 2478.0 2790.0 2861.0 2957.0 2395.0 2372.0 2441.0 2410 2500 Depreciation ($mill) 2775
Leases, Uncapitalized Annual rentals $62 mill. -- - - 1707.0 1582.0 1593.0 969.0 d897.0 d708.0 d220.0 645.3 685 780 Net Profit ($mill) 1625
Pension Assets - 12/18 $797 mill. -- - - 61.4% 74.1% 67.7% 28.8% -- -- NMF 35.2% NMF 14.0% Income Tax Rate 20.0%
-- - - 11.2% 9.8% 11.0% 8.9% NMF NMF NMF 11.4% 13.2% 14.3% Net Profit Margin 24.1%
Pfd Stock None -- - - d1170 d1319 d1358 214.0 861.0 1425.0 598.0 1089.0 200 500 Working Cap’l ($mill) 1800
-- - - 4674.0 6512.0 6394.0 5323.0 7276.0 6589.0 5494.0 5499.0 4850 4650 Long-Term Debt ($mill) 4200
Common Stock 799,928,541 shs. -- - - 17152 18283 19344 21020 18553 17541 11708 12128 12725 12950 Shr. Equity ($mill) 14200
as of 10/31/19 -- -- 8.1% 6.7% 6.7% 4.2% NMF NMF NMF 4.3% 4.5% 5.0% Return on Total Cap’l 9.0%
-- - - 10.0% 8.7% 8.2% 4.6% NMF NMF NMF 5.3% 5.5% 6.0% Return on Shr. Equity 11.5%
MARKET CAP: $10.3 billion (Large Cap) -- -- 8.7% 6.0% 5.6% 2.0% NMF NMF NMF 3.9% 4.0% 5.0% Retained to Com Eq 9.5%
CURRENT POSITION 2017 2018 9/30/19 -- -- 12% 30% 32% 56% NMF NMF NMF 26% 23% 20% All Div’ds to Net Prof 19%
($MILL.)
Cash Assets 563 1462 1165 BUSINESS: Marathon Oil Corp. is an independent oil and natural marketing business to shareholders, 7/11. Has about 2,300 em-
Receivables 1830 1079 1148 gas producing company. Daily 2018 sales: oil, 210,000 barrels; nat- ployees. Officers and directors own less than 1% of stock. The
Inventory (cost) 126 96 71
Other 47 284 136 ural gas, 864 million cubic feet. Average realized 2018 prices: Vanguard Group, 11.25%; BlackRock owns 8.2% (4/19 Proxy).
Current Assets 2566 2921 2520 $63.32 per barrel of oil; $1.58 per million cubic feet of natural gas. Chairman: Dennis Reilley. President & CEO: Lee M. Tillman, Jr.
Accts Payable 1395 1320 1374 Reserves (12/31/18): 1.281 billion barrels of oil equivalent (Africa, Inc.: DE. Address: 5555 San Felipe St., Houston, TX 77056. Tele-
Debt Due -- -- 600 14%; United States, 84%; Europe, 2%. Spun off its refining and phone: 713-629-6600. Internet: www.marathonoil.com.
Other 573 512 405
Current Liab. 1968 1832 2379 Marathon Oil Corporation is execut- the third-period average price. We are
ing well in a tough oil price environm- comfortable with our above-consensus call
ANNUAL RATES Past Past Est’d ’16-’18
of change (per sh) 10 Yrs. 5 Yrs. ent. Indeed, the company reported third-
to ’22-’24 since the company has been cutting costs
Revenues - - -24.0% quarter earnings of $0.14 a share, $0.08
7.5% consistently and beating its production
‘‘Cash Flow’’ - - -14.0% 13.0% above the consensus estimate and only a guidance. At the same time, an aggressive
Earnings -- -- NMF
penny below our projection. Total oil prod- share-buyback program helps to ease the
Dividends - - -19.0% 12.0%
Book Value -- -9.0% uction jumped 14% (divestiture adjusted)
2.0% impact of lower oil prices on share net. For
during the third period to 216,000 barrels 2020, we have shaved our full-year es-
Cal- QUARTERLY REVENUES ($ mill.) Full per day (bp/d), while U.S. production in-
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
timate by $0.15 a share to $1.00, to better
creased 13%. Even so, margins remained reflect low oil and natural gas liquids
2016 772 959 1100 1200 4031 pressured due to weak oil, natural gas, prices and a likely slowing in production
2017 988 993 1162 1230 4373
2018 1478 1340 1468 1354 5640 and natural gas liquids pricing. In fact, growth to a mid-single-digit rate.
2019 1222 1397 1263 1313 5195 the average realized crude oil and con- These shares are untimely. Even so,
2020 1325 1355 1375 1400 5455 densate price fell 19.5% year over year to Marathon stock is well suited for risk-
EARNINGS PER SHARE A $55.09 per barrel, while internationally tolerant accounts with long-term invest-
Cal- Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year the price fell 28% to $46.04 per barrel. ment horizons. The board is shareholder
Our 2019 full-year share-net estimate friendly and has returned over $1.2 billion
2016 d.45 d.23 d.11 d.10 d.85
2017 d.07 d.17 d.10 d.07 d.27 remains $0.85. During its third-quarter to shareholders over the past two years
2018 .18 .15 .28 .15 .76 earnings release conference call, manage- through share repurchases and dividends.
2019 .31 .23 .14 .17 .85 ment guided Marathon’s U.S. oil prod- The company has done a good job of selling
2020 .19 .22 .27 .32 1.00 uction to a range of 190,000 barrels of oil off noncore assets, and we expect this
QUARTERLY DIVIDENDS PAID B■† per day (bop/d)-200,000 bop/d. The U.S. trend to continue. Meanwhile, its focus on
Cal- Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year operations produced 201,000 bop/d in the developing its U.S. shale oil plays should
September period. Even so, we think prod- lead to high single-digit production growth
2016 .05 .05 .05 .05 .20 uction was either even with the third in the coming 3 to 5 years. All said, the
2017 .05 .05 .05 .05 .20
2018 .05 .05 .05 .05 .20 quarter’s tally or slightly above it. Oil shares offer substantial recovery potential
2019 .05 .05 .05 .05 .20 prices were volatile through the end of De- over the pull to 2022-2024.
2020 cember, but overall likely averaged close to Wayne C. Nef January 31, 2020
(A) Diluted earnings. Next earnings report due ($0.23); ’17, ($0.61); ’18, ($0.53). Quarterlies vestment plan available. † Direct stock pur- Company’s Financial Strength B++
early February. Excludes discontinued opera- may not sum due to rounding. (B) Dividends chase plan available. (C) In millions. Stock’s Price Stability 10
tions gains/(losses): ’13, $0.23; ’14, $3.04. historically paid near the middle of March, Price Growth Persistence 10
Nonrecurring gains/(losses): ’15, ($1.93); ’16, June, September, and December. ■ Div’d rein- Earnings Predictability 10
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