Marathon Petroleum (NYSE:MPC) and Sunoco (NYSE:SUN) Head to Head Survey

Sunoco (NYSE:SUN) and Marathon Petroleum (NYSE:MPC) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sunoco and Marathon Petroleum, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunoco 1 1 6 0 2.63
Marathon Petroleum 1 5 10 0 2.56

Sunoco currently has a consensus price target of $29.14, suggesting a potential downside of 2.50%. Marathon Petroleum has a consensus price target of $41.93, suggesting a potential downside of 5.40%. Given Sunoco’s stronger consensus rating and higher probable upside, equities analysts plainly believe Sunoco is more favorable than Marathon Petroleum.

Valuation & Earnings

This table compares Sunoco and Marathon Petroleum’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sunoco $16.60 billion 0.18 $313.00 million $2.27 13.17
Marathon Petroleum $124.88 billion 0.23 $2.64 billion $4.94 8.97

Marathon Petroleum has higher revenue and earnings than Sunoco. Marathon Petroleum is trading at a lower price-to-earnings ratio than Sunoco, indicating that it is currently the more affordable of the two stocks.

Dividends

Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 11.0%. Marathon Petroleum pays an annual dividend of $2.32 per share and has a dividend yield of 5.2%. Sunoco pays out 145.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marathon Petroleum pays out 47.0% of its earnings in the form of a dividend.

Profitability

This table compares Sunoco and Marathon Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunoco 1.29% 15.93% 2.03%
Marathon Petroleum -11.11% -1.81% -0.68%

Volatility & Risk

Sunoco has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 2.25, suggesting that its stock price is 125% more volatile than the S&P 500.

Institutional & Insider Ownership

25.1% of Sunoco shares are held by institutional investors. Comparatively, 67.0% of Marathon Petroleum shares are held by institutional investors. 0.8% of Marathon Petroleum shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Marathon Petroleum beats Sunoco on 9 of the 16 factors compared between the two stocks.

Sunoco Company Profile

Sunoco LP, together with its subsidiaries, engages in the distribution and retailing of motor fuels in the United States. It operates through two segments, Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel from independent refiners and major oil companies and supplies it to independently operated dealer stations, distributors and other consumer of motor fuel, and partnership operated stations, as well as to commission agent locations. The All Other segment operates retail stores that offer motor fuel, merchandise, foodservice, and other services that include car washes, lottery, automated teller machines, money orders, prepaid phone cards, and wireless services. It also leases and rents real estate properties. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP was incorporated in 2012 and is headquartered in Dallas, Texas.

Marathon Petroleum Company Profile

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, marketing, retailing, and transporting petroleum products primarily in the United States. It operates through three segments: Refining & Marketing, Retail, and Midstream. The Refining & Marketing segment refines crude oil and other feed stocks at its 16 refineries in the West Coast, Gulf Coast, and Mid-Continent regions of the United States; and purchases refined products and ethanol for resale. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures aromatics, propane, propylene, and sulfur. It sells refined products wholesale marketing customers domestically and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets. The Retail segment sells transportation fuels and convenience products in the retail market through company-owned and operated convenience stores, primarily under the Speedway brand; and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. The company also exports its refined products. As of September 30, 2020, it owned, leased, and had ownership interests in approximately 17,200 miles of crude oil and refined product pipelines, as well as owned and operated 3,854 convenience stores; and had approximately 7,000 branded outlets operated by independent entrepreneurs in 35 states of the United States, the District of Columbia, and Mexico. The company was founded in 1887 and is headquartered in Findlay, Ohio.

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