Marathon Petroleum Corp Stock Sell Recommendation Reiterated (MPC)

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 ( TheStreet) -- Marathon Petroleum (NYSE: MPC) has been reiterated by TheStreet Ratings as a sell with a ratings score of D+ . Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:
  • 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.
  • MPC, with its decline in revenue, slightly underperformed the industry average of 2.7%. 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 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.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 1.5% when compared to the same quarter one year prior, going from $802.00 million to $814.00 million.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MARATHON PETROLEUM CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, transporting, and marketing petroleum products primarily in the United States. The company has a P/E ratio of 7.2, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Marathon has a market cap of $17.18 billion and is part of the basic materials sector and energy industry. Shares are up 52.6% year to date as of the close of trading on Wednesday.

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

--Written by a member of TheStreet Ratings Staff.

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