NYSE:MRO

Stock Analysis Report

Executive Summary

Marathon Oil Corporation operates as an energy company in the United States, Equatorial Guinea, the United Kingdom, and Libya.


Snowflake Analysis

Good value second-rate dividend payer.


Similar Companies

Share Price & News

How has Marathon Oil's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MRO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.3%

MRO

-1.3%

US Oil and Gas

0.06%

US Market


1 Year Return

-39.7%

MRO

-19.5%

US Oil and Gas

19.4%

US Market

Return vs Industry: MRO underperformed the US Oil and Gas industry which returned -18.7% over the past year.

Return vs Market: MRO underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

MROIndustryMarket
7 Day-11.3%-1.3%0.06%
30 Day-22.0%-10.1%1.1%
90 Day-13.4%-7.0%8.9%
1 Year-38.7%-39.7%-16.3%-19.5%21.9%19.4%
3 Year-31.9%-34.6%-13.3%-21.4%48.9%39.3%
5 Year-61.4%-64.6%-22.4%-33.8%71.9%53.1%

Price Volatility Vs. Market

How volatile is Marathon Oil's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Marathon Oil undervalued compared to its fair value and its price relative to the market?

33.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MRO ($10.64) is trading below our estimate of fair value ($15.59)

Significantly Below Fair Value: MRO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MRO is poor value based on its PE Ratio (18x) compared to the Oil and Gas industry average (9x).

PE vs Market: MRO is good value based on its PE Ratio (18x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: MRO is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: MRO is good value based on its PB Ratio (0.7x) compared to the US Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Marathon Oil forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

14.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRO's forecast earnings growth (14.4% per year) is above the savings rate (1.7%).

Earnings vs Market: MRO's earnings (14.4% per year) are forecast to grow slower than the US market (14.6% per year).

High Growth Earnings: MRO's earnings are forecast to grow, but not significantly.

Revenue vs Market: MRO's revenue (4.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MRO's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MRO's Return on Equity is forecast to be low in 3 years time (8.3%).


Next Steps

Past Performance

How has Marathon Oil performed over the past 5 years?

31.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MRO has a large one-off loss of $101.0M impacting its December 31 2019 financial results.

Growing Profit Margin: MRO's current net profit margins (9.4%) are lower than last year (18.8%).


Past Earnings Growth Analysis

Earnings Trend: MRO has become profitable over the past 5 years, growing earnings by 31.9% per year.

Accelerating Growth: MRO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MRO had negative earnings growth (-56.2%) over the past year, making it difficult to compare to the Oil and Gas industry average (-10.9%).


Return on Equity

High ROE: MRO's Return on Equity (3.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Marathon Oil's financial position?


Financial Position Analysis

Short Term Liabilities: MRO's short term assets ($2.5B) exceed its short term liabilities ($2.4B).

Long Term Liabilities: MRO's short term assets ($2.5B) do not cover its long term liabilities ($5.7B).


Debt to Equity History and Analysis

Debt Level: MRO's debt to equity ratio (44.9%) is considered high.

Reducing Debt: MRO's debt to equity ratio has increased from 30.3% to 44.9% over the past 5 years.


Balance Sheet

Inventory Level: MRO has a high level of physical assets or inventory.

Debt Coverage by Assets: MRO's debt is not covered by short term assets (assets are 0.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MRO is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: MRO is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Marathon Oil's current dividend yield, its reliability and sustainability?

1.94%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage4.6%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: MRO's dividend (1.88%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MRO's dividend (1.88%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: MRO's dividend payments have been volatile in the past 10 years.

Growing Dividend: MRO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.8%), MRO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MRO's dividends in 3 years are forecast to be well covered by earnings (19.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Lee Tillman (57yo)

6.5yrs

Tenure

US$12,210,874

Compensation

Mr. Lee M. Tillman has been the Chief Executive Officer, President and Director of Marathon Oil Corporation since August 1, 2013 and has been its Chairman since February 1, 2019. Mr. Tillman served as a Vi ...


CEO Compensation Analysis

Compensation vs Market: Lee's total compensation ($USD12.21M) is above average for companies of similar size in the US market ($USD6.26M).

Compensation vs Earnings: Lee's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Lee Tillman
Chairman6.5yrsUS$12.21m0.079% $6.7m
Dane Whitehead
Executive VP & CFO2.9yrsUS$3.73m0.030% $2.5m
T. Little
Executive Vice President of Operations3.5yrsUS$4.62m0.035% $3.0m
Reginald Hedgebeth
EVP, General Counsel & Chief Administrative Officer0.5yrsUS$3.01m0.012% $1.0m
Patrick Wagner
Executive Vice President of Corporate Development & Strategy2.3yrsUS$3.60m0.020% $1.7m
Gary Wilson
VP, Controller & Chief Accounting Officer5.3yrsno data0.0089% $752.3k
Bruce McCullough
Senior VP of Technology & Innovation and Chief Information Officer3.5yrsno datano data
Guy Baber
Vice President of Investor Relations1.6yrsno datano data

3.2yrs

Average Tenure

56yo

Average Age

Experienced Management: MRO's management team is considered experienced (3.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Lee Tillman
Chairman6.5yrsUS$12.21m0.079% $6.7m
Douglas Foshee
Independent Director1.8yrsUS$243.75k0.012% $990.4k
Chadwick Deaton
Independent Director6.1yrsUS$337.50k0.0032% $272.8k
Gregory Boyce
Lead Independent Director1yrsUS$360.00k0.0059% $498.2k
Marcela Donadio
Independent Director5.2yrsUS$343.75k0.0025% $215.2k
Jason Few
Independent Director0.8yrsno data0.0026% $216.0k
M. Hyland
Independent Director1.8yrsUS$250.00kno data
J. Wells
Independent Director0.8yrsno datano data

1.4yrs

Average Tenure

61yo

Average Age

Experienced Board: MRO's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Marathon Oil Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Marathon Oil Corporation
  • Ticker: MRO
  • Exchange: NYSE
  • Founded: 1887
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: US$8.472b
  • Shares outstanding: 796.24m
  • Website: https://www.marathonoil.com

Number of Employees


Location

  • Marathon Oil Corporation
  • 5555 San Felipe Street
  • Houston
  • Texas
  • 77056
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MRONYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
USSDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
MRO *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0JY9LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
M1RO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

Marathon Oil Corporation operates as an energy company in the United States, Equatorial Guinea, the United Kingdom, and Libya. It operates in two segments, United States and International. The company engages in the exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas; and the production and marketing of products manufactured from natural gas, such as liquefied natural gas and methanol. As of December 31, 2018, it had estimated proved developed reserves totaling 752 million barrels of oil equivalent (mmboe); and estimated proved undeveloped reserves totaling 529 mmboe. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in July 2001. Marathon Oil Corporation was founded in 1887 and is headquartered in Houston, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:14
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.