-0.66 | -2.59%
MARATHON OIL CORP's gross profit margin for the first quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. MARATHON OIL CORP has weak liquidity. Currently, the Quick Ratio is 0.59 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
At the same time, stockholders' equity ("net worth") has significantly decreased by 29.16% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
| Income Statement | Q1 FY12 | Q1 FY11 |
|---|---|---|
| Net Sales ($mil) | 3791.0 | 3671.0 |
| EBITDA ($mil) | 1981.0 | 1786.0 |
| EBIT ($mil) | 1145.0 | 1151.0 |
| Net Income ($mil) | 417.0 | 996.0 |
| Balance Sheet | Q1 FY12 | Q1 FY11 |
|---|---|---|
| Cash & Equiv. ($mil) | 513.0 | 5716.0 |
| Total Assets ($mil) | 31851.0 | 51865.0 |
| Total Debt ($mil) | 4756.0 | 8341.0 |
| Equity ($mil) | 17499.0 | 24705.0 |
| Profitability | Q1 FY12 | Q1 FY11 |
|---|---|---|
| Gross Profit Margin | 59.17 | 58.65 |
| EBITDA Margin | 52.26 | 48.65 |
| Operating Margin | 30.2 | 31.35 |
| Sales Turnover | 0.46 | 0.24 |
| Return on Assets | 7.43 | 5.99 |
| Return on Equity | 9.54 | 6.96 |
| Debt | Q1 FY12 | Q1 FY11 |
|---|---|---|
| Current Ratio | 0.74 | 1.34 |
| Debt/Capital | 0.21 | 0.25 |
| Interest Expense | 0.0 | 0.0 |
| Interest Coverage | 0.0 | 0.0 |
| Share Data | Q1 FY12 | Q1 FY11 |
|---|---|---|
| Shares outstanding (mil) | 705.0 | 712.0 |
| Div / share | 0.17 | 0.25 |
| EPS | 0.59 | 0.64 |
| Book value / share | 24.82 | 34.7 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 6681128.0 | 6895210.0 |
HOLD. This stock's P/E ratio indicates a discount compared to an average of 16.38 for the Oil, Gas & Consumable Fuels industry and a discount compared to the S&P 500 average of 15.19. To use another comparison, its price-to-book ratio of 1.00 indicates a discount versus the S&P 500 average of 2.12 and a significant discount versus the industry average of 5.14. The current price-to-sales ratio is similar to the S&P 500 average, but it is below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, MARATHON OIL CORP proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MRO 10.54 | Peers 16.38 | MRO 3.55 | Peers 11.76 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. MRO is trading at a significant discount to its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. MRO is trading at a significant discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| MRO 6.38 | Peers 11.24 | MRO 0.26 | Peers 1.10 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. MRO is trading at a significant discount to its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. MRO trades at a significant discount to its peers. |
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| Price/Book |
|
Earnings Growth |
|
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| MRO 1.00 | Peers 5.14 | MRO -2.89 | Peers 94.39 | |||||||||||||||||||||
|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. MRO is trading at a significant discount to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, MRO is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| MRO 1.19 | Peers 1.56 | MRO 16.45 | Peers 29.11 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. MRO is trading at a discount to its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. MRO significantly trails its peers on the basis of sales growth |
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