Murphy USA (MUSA) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Murphy USA (MUSA) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Murphy USA Fundamentals
Stock Price Target: $217.92
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Murphy USA in comparison to the Automotive Retail industry and the S&P 500.
Murphy USA is a Mid Cap company with a Market Cap of $5.08B.
How are investors using Murphy USA earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Murphy USA is 15.38%, in comparison to 3.39% for the S&P 500 and 1.76% for the 10-year treasury bond. The median earnings yield for the Auto Retail industry is 8.22%.
What does Murphy USA Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Murphy USA is currently trading at a P/E of 15.33. The P/E for the Auto Retail industry is 24.40 and the P/E for the S&P 500 is 29.46.
What is the current Price-to-Sales Ratio (P/S) for Murphy USA?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Murphy USA is currently trading at a P/S of 0.51. The P/S for the Auto Retail industry is 0.87 and the P/S for the S&P 500 is 3.20.
How does Murphy USA Price-to-BookRatio (P/B) compare to the Automotive Retail industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Murphy USA P/B ratio is 6.89. The P/B for the Auto Retail industry is 7.06 and the P/B for the S&P 500 is 4.82.
How attractive is Murphy USA Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Murphy USA ROIC is currently 13.89% in comparison to 15.47% for the Auto Retail industry and 9.10% for the S&P 500.
How has MUSA stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Murphy USA has traded between the range of $119.47 and $202.20.
The current Analyst Price Target for Murphy USA is $217.92.
What is Murphy USA YOY Performance in comparison to its industry and the total market?
The YOY performance for Murphy USA is 53.01%. The Auto Retail industry has a YOY performance of 40.95% in comparison to the YOY S&P 500 performance of 25.50%.
Recent Financial Results
- Net income of $104.0M, or $3.98 per diluted share, in Q3 2021 compared to net income of $66.9M, or $2.27 per diluted share, in Q3 2020
- Total retail gallons increased 11.4% in Q3 2021 compared to Q3 2020, while volumes on a same store sales basis increased 1.9%
- Merchandise contribution dollars increased 58.6% to $187.3M compared to the prior-year quarter, on average unit margins of 19.6% in the current quarter, primarily attributable to the QuickChek acquisition
- Common shares repurchased during Q3 2021 were approximately 0.2M for $33.2M at an average price of $153.95 per share
- The Company also announced a quarterly cash dividend of $0.29 per Common share
- $1 Billion Repurchase Program announced on December 1, 2021
- Q4 2021 Annual results to be reported on February 2, 2022
Stock Price Target: $217.92
Murphy USA engages in marketing of retail motor fuel products and convenience merchandise. The company operates retail stores under the Murphy USA and Murphy Express brand names. As of February 2021, it operated 1,503 retail gasoline stores principally in the Southeast, Southwest, and Midwest United States.
The company was founded in 1996 and is headquartered in El Dorado, Arkansas. The current CEO is Andrew Clyde.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.