Marathon Oil Corp Stock Hold Recommendation Reiterated (MRO)

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 Oil (NYSE: MRO) 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 revenue growth, increase in stock price during the past year and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • MARATHON OIL CORP has improved earnings per share by 10.5% 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, MARATHON OIL CORP reported lower earnings of $2.41 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $2.41).
  • Net operating cash flow has declined marginally to $1,070.00 million or 0.92% when compared to the same quarter last year. Despite a decrease in cash flow MARATHON OIL CORP is still fairing well by exceeding its industry average cash flow growth rate of -18.49%.
  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.

Marathon Oil Corporation operates as an energy company worldwide. The company operates in three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. Marathon Oil has a market cap of $21.35 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 11.9, below the S&P 500 P/E ratio of 17.7. Shares are up 3.3% year to date as of the close of trading on Tuesday.

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

--Written by a member of TheStreet Ratings Staff.

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