Contrasting Global Partners (NYSE:GLP) and Murphy Oil (NYSE:MUR)

Murphy Oil (NYSE:MUR) and Global Partners (NYSE:GLP) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings for Murphy Oil and Global Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	2	8	4	1	2.27
Global Partners	0	2	1	0	2.33

Murphy Oil presently has a consensus price target of $39.75, indicating a potential downside of 0.97%. Global Partners has a consensus price target of $46.00, indicating a potential upside of 0.24%. Given Global Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Global Partners is more favorable than Murphy Oil.

Valuation and Earnings

This table compares Murphy Oil and Global Partners”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$2.99 billion	1.92	$104.23 million	$2.02	19.87
Global Partners	$21.46 billion	0.07	$79.22 million	$4.91	9.35

Murphy Oil has higher earnings, but lower revenue than Global Partners. Global Partners is trading at a lower price-to-earnings ratio than Murphy Oil, indicating that it is currently the more affordable of the two stocks.

Dividends

Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. Global Partners pays an annual dividend of $3.14 per share and has a dividend yield of 6.8%. Murphy Oil pays out 69.3% of its earnings in the form of a dividend. Global Partners pays out 64.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Murphy Oil has raised its dividend for 5 consecutive years and Global Partners has raised its dividend for 5 consecutive years. Global Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Murphy Oil has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Global Partners has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Murphy Oil and Global Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	9.74%	6.63%	3.51%
Global Partners	0.91%	30.87%	4.92%

Insider & Institutional Ownership

78.3% of Murphy Oil shares are held by institutional investors. Comparatively, 38.1% of Global Partners shares are held by institutional investors. 5.8% of Murphy Oil shares are held by company insiders. Comparatively, 41.5% of Global Partners 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

Global Partners beats Murphy Oil on 10 of the 17 factors compared between the two stocks.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.

About Global Partners

Global Partners LP engages in the purchasing, selling, gathering, blending, storing, and logistics of transporting gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers. The company operates through three segments: Wholesale, Gasoline Distribution and Station Operations, and Commercial. The Wholesale segment sells home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene, and residual oil to home heating oil and propane retailers and wholesale distributors. This segment also transports the products by railcars, barges, trucks and/or pipelines. Its Gasoline Distribution and Station Operations segment sells branded and unbranded gasoline to gasoline station operators and sub-jobbers; operates gasoline stations and convenience stores; and provides car wash, lottery, and ATM services, as well as leases gasoline stations. The Commercial segment sells and delivers unbranded gasoline, home heating oil, diesel, kerosene, residual oil, and bunker fuel to customers in the public sector, as well as to commercial and industrial end-users; and sells custom blended fuels. The company is also involved in the transportation of petroleum products and renewable fuels through rail from the mid-continent region of the United States and Canada. Global Partners LP was founded in 2005 and is based in Waltham, Massachusetts.