Should Your Next Investment In The Energy Industry Be In Marine Petroleum Trust (NASDAQ:MARP.S)?

Marine Petroleum Trust (NASDAQ:MARP.S), a US$8.09M small-cap, operates in the oil and gas industry which has endured an extended oil price slump since 2014. However, energy-sector analysts are forecasting for the entire industry, a strong double-digit growth of 13.35% in the upcoming year , and an overall negative growth rate in the next couple of years. Unsuprisingly, this is below the growth rate of the US stock market as a whole. An interesting question to explore is whether we can we benefit from entering into the oil and gas sector right now. In this article, I’ll take you through the energy sector growth expectations, and also determine whether Marine Petroleum Trust is a laggard or leader relative to its energy sector peers. View our latest analysis for Marine Petroleum Trust

What’s the catalyst for Marine Petroleum Trust's sector growth?

The oil price collapse triggered a wave of cost reduction among energy businesses as the sector as a whole faced negative growth over the past five years. Large energy businesses have slashed their growth expenditures by over 40% since the collapse, and reduced headcount by nearly half a million workers. However, recently the sector saw a reversal in the downturn, and in the past year, the industry turnaround delivered growth in the teens, beating the US market growth of 9.86%. Marine Petroleum Trust lags the pack with its lower growth rate of 15.88% over the past year, which indicates the company has been growing at a slower pace than its energy peers. As the company trails the rest of the industry in terms of growth, Marine Petroleum Trust may also be a cheaper stock relative to its peers.

Is Marine Petroleum Trust and the sector relatively cheap?

Oil and gas companies are typically trading at a PE of 13.81x, lower than the rest of the US stock market PE of 18.97x. This illustrates a somewhat under-priced sector compared to the rest of the market. Though, the industry returned a similar 10.12% on equities compared to the market’s 10.30%, potentially illustrative of a turnaround. On the stock-level, Marine Petroleum Trust is trading at a PE ratio of 11.16x, which is relatively in-line with the average oil and gas stock. In terms of returns, Marine Petroleum Trust generated 77.13% in the past year, which is 67.01% over the oil and gas sector.

Next Steps:

Marine Petroleum Trust has been an energy industry laggard in the past year. It delivered lower earnings growth compared to its energy peers in the near term, and it is also trading at a PE in-line with these companies. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the energy sector. However, before you make a decision on the stock, I suggest you look at Marine Petroleum Trust's fundamentals in order to build a holistic investment thesis.

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Historical Track Record: What has MARP.S's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Marine Petroleum Trust? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.