Marathon Oil (NYSE:MRO) - Share price, News & Analysis

MRO fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	3/6
Financial Health	5/6
Dividends	2/6

MRO Stock Overview

Marathon Oil Corporation operates as an independent exploration and production company in the United States and internationally.

Rewards

Trading at 44.8% below our estimate of its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 40% per year for the next 3 years

Significant insider selling over the past 3 months

Marathon Oil Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Marathon Oil
Historical stock prices
Current Share Price	US$22.05
52 Week High	US$33.24
52 Week Low	US$10.41
Beta	2.57
1 Month Change	-23.99%
3 Month Change	-15.32%
1 Year Change	56.72%
3 Year Change	55.17%
5 Year Change	86.08%
Change since IPO	22.50%

Recent News & Updates

Jun 18

There's Been No Shortage Of Growth Recently For Marathon Oil's (NYSE:MRO) Returns On Capital

What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a...

Jun 14

Marathon Oil: Shareholder Distribution Could Reach +10%

Even after its strong rally, Marathon Oil is going to return more than 10% of its market cap to shareholders via repurchases and dividends. Marathon Oil is not ''more of the same'' E&P stock. I discuss what sets Marathon Oil apart from its peers. I estimate that Marathon Oil is now priced at just under 4x free cash flow. I lay out my estimates for Marathon Oil returning approximately $2.5 billion to shareholders. As always, happy to discuss my thesis further in the comments section.

Jun 02

Is Marathon Oil A Good Dividend Stock? Focus On Yield And Safety

Marathon Oil's dividend yields are not as appealing as most of its peers and are also below that of the broad market index. However, MRO scores well on the dividend safety measure, as its dividend payout ratio is sufficiently low which will enable the company to maintain dividends in absolute terms. My rating for Marathon Oil is a Hold.

Shareholder Returns

	MRO	US Oil and Gas	US Market
7D	-8.7%	-8.4%	4.0%
1Y	56.7%	24.6%	-20.5%

Return vs Industry: MRO exceeded the US Oil and Gas industry which returned 24.6% over the past year.

Return vs Market: MRO exceeded the US Market which returned -20.5% over the past year.

Price Volatility

Is MRO's price volatile compared to industry and market?
MRO volatility
MRO Average Weekly Movement	8.5%
Oil and Gas Industry Average Movement	8.7%
Market Average Movement	7.9%
10% most volatile stocks in US Market	16.5%
10% least volatile stocks in US Market	3.1%

Stable Share Price: MRO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: MRO's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1887	1,531	Lee Tillman	https://www.marathonoil.com

Marathon Oil Corporation operates as an independent exploration and production company in the United States and internationally. 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. It also owns and operates 32 central gathering and treating facilities; and the Sugarloaf gathering system, a 42-mile natural gas pipeline through Karnes and Atascosa Counties.

Marathon Oil Fundamentals Summary

How do Marathon Oil's earnings and revenue compare to its market cap?
MRO fundamental statistics
Market Cap	US$15.58b
Earnings (TTM)	US$2.15b
Revenue (TTM)	US$6.21b

7.2x

P/E Ratio

2.5x

P/S Ratio

Is MRO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MRO income statement (TTM)
Revenue	US$6.21b
Cost of Revenue	US$1.33b
Gross Profit	US$4.88b
Other Expenses	US$2.73b
Earnings	US$2.15b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 04, 2022

Earnings per share (EPS)	3.04
Gross Margin	78.65%
Net Profit Margin	34.70%
Debt/Equity Ratio	35.3%

How did MRO perform over the long term?

See historical performance and comparison

Dividends

1.5%

Current Dividend Yield

9%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MRO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MRO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MRO. This is calculated by dividing MRO's market cap by their current preferred multiple.
What is MRO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$15.58b

MRO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.1x
Enterprise Value/EBITDA	5x
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does MRO's PE Ratio compare to its peers?

MRO PE Ratio vs Peers

The above table shows the PE ratio for MRO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	24.3x

Forward PE

Price-To-Earnings vs Peers: MRO is good value based on its Price-To-Earnings Ratio (7.2x) compared to the peer average (24.3x).

Price to Earnings Ratio vs Industry

How does MRO's PE Ratio compare vs other companies in the U.S. Oil and Gas Industry?

Price-To-Earnings vs Industry: MRO is good value based on its Price-To-Earnings Ratio (7.2x) compared to the US Oil and Gas industry average (11.4x)

Price to Earnings Ratio vs Fair Ratio

What is MRO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MRO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.2x
Fair PE Ratio	8.6x

Price-To-Earnings vs Fair Ratio: MRO is good value based on its Price-To-Earnings Ratio (7.2x) compared to the estimated Fair Price-To-Earnings Ratio (8.6x).

Share Price vs Fair Value

What is the Fair Price of MRO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MRO ($22.05) is trading below our estimate of fair value ($39.97)

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

Price to Earnings Growth Ratio

PEG Ratio: MRO's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Marathon Oil forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-40.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRO's earnings are forecast to decline over the next 3 years (-40% per year).

Earnings vs Market: MRO's earnings are forecast to decline over the next 3 years (-40% per year).

High Growth Earnings: MRO's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MRO's revenue is expected to decline over the next 3 years (-13.8% per year).

High Growth Revenue: MRO's revenue is forecast to decline over the next 3 years (-13.8% 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 (11.8%).

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Past Performance

How has Marathon Oil performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

30.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MRO has high quality earnings.

Growing Profit Margin: MRO became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: MRO has become profitable over the past 5 years, growing earnings by 30.1% per year.

Accelerating Growth: MRO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MRO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (98.5%).

Return on Equity

High ROE: MRO's Return on Equity (18.9%) is considered low.

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Financial Health

How is Marathon Oil's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MRO's short term assets ($2.2B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: MRO's short term assets ($2.2B) do not cover its long term liabilities ($4.6B).

Debt to Equity History and Analysis

Debt Level: MRO's net debt to equity ratio (29.3%) is considered satisfactory.

Reducing Debt: MRO's debt to equity ratio has reduced from 57.7% to 35.3% over the past 5 years.

Debt Coverage: MRO's debt is well covered by operating cash flow (91.8%).

Interest Coverage: MRO's interest payments on its debt are well covered by EBIT (8.3x coverage).

Balance Sheet

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Dividend

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

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.45%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MRO's dividend (1.45%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: MRO's dividend (1.45%) is low compared to the top 25% of dividend payers in the US market (4.34%).

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.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (9.3%), MRO's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (9%), MRO's dividend payments are thoroughly covered by cash flows.

Discover strong dividend paying companies

Management

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

3.9yrs

Average management tenure

CEO

Lee Tillman (59 yo)

8.83yrs

Tenure

US$12,997,292

Compensation

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

CEO Compensation Analysis

Compensation vs Market: Lee's total compensation ($USD13.00M) is about average for companies of similar size in the US market ($USD13.59M).

Compensation vs Earnings: Lee's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: MRO's management team is considered experienced (3.9 years average tenure).

Board Members

Experienced Board: MRO's board of directors are considered experienced (4.2 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: MRO insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31