Murphy Oil Corporation Stock Upgraded (MUR)

NEW YORK ( TheStreet) -- Murphy Oil Corporation (NYSE: MUR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MURPHY OIL CORP has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MURPHY OIL CORP reported lower earnings of $3.80 versus $4.04 in the prior year. This year, the market expects an improvement in earnings ($5.30 versus $3.80).
  • MUR's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
  • MUR, with its decline in revenue, slightly underperformed the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for MURPHY OIL CORP is currently extremely low, coming in at 14.10%. Regardless of MUR'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 4.10% trails the industry average.

Murphy Oil Corporation, through its subsidiaries, engages in the exploration and production of oil and gas properties worldwide. It explores for and produces crude oil, natural gas, and natural gas liquids. The company has a P/E ratio of 13.2, above the average energy industry P/E ratio of 12.2 and below the S&P 500 P/E ratio of 17.7. Murphy Oil has a market cap of $10.74 billion and is part of the basic materials sector and energy industry. Shares are down 0.8% year to date as of the close of trading on Monday.

You can view the full Murphy Oil Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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.
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