Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 51.39% over the past year, a rise that has exceeded that of the S&P 500 Index. Although MPC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- MARATHON PETROLEUM CORP has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($9.03 versus $5.19).
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
- MPC, with its decline in revenue, slightly underperformed the industry average of 1.1%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for MARATHON PETROLEUM CORP is currently extremely low, coming in at 10.10%. Regardless of MPC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.30% trails the industry average.
Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, transporting, and marketing petroleum products primarily in the United States. Marathon has a market cap of $18.44 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 7.8, below the S&P 500 P/E ratio of 17.7. Shares are up 63.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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