Marathon Oil Corp Stock Buy 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 buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows 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 6.6%. 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 gross profit margin for MARATHON OIL CORP is rather high; currently it is at 64.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 11.15% is above that of the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 11.1% when compared to the same quarter one year prior, going from $405.00 million to $450.00 million.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.

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 $23.74 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 13.2, below the S&P 500 P/E ratio of 17.7. Shares are up 9.6% year to date as of the close of trading on Friday.

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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