BP Prudhoe Bay Royalty Trust (NYSE:BPT) and Marathon Petroleum (NYSE:MPC) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares BP Prudhoe Bay Royalty Trust and Marathon Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BP Prudhoe Bay Royalty Trust 99.03% 16,432.79% 11,244.77%
Marathon Petroleum 2.86% 14.14% 5.74%

Earnings & Valuation

This table compares BP Prudhoe Bay Royalty Trust and Marathon Petroleum’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BP Prudhoe Bay Royalty Trust $114.37 million 5.00 $113.28 million N/A N/A
Marathon Petroleum $97.10 billion 0.42 $2.78 billion $6.78 9.02

Marathon Petroleum has higher revenue and earnings than BP Prudhoe Bay Royalty Trust.

Dividends

BP Prudhoe Bay Royalty Trust pays an annual dividend of $4.01 per share and has a dividend yield of 15.0%. Marathon Petroleum pays an annual dividend of $2.12 per share and has a dividend yield of 3.5%. Marathon Petroleum pays out 31.3% of its earnings in the form of a dividend. BP Prudhoe Bay Royalty Trust has increased its dividend for 2 consecutive years and Marathon Petroleum has increased its dividend for 8 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for BP Prudhoe Bay Royalty Trust and Marathon Petroleum, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BP Prudhoe Bay Royalty Trust 0 0 0 0 N/A
Marathon Petroleum 0 1 13 1 3.00

Marathon Petroleum has a consensus price target of $92.74, suggesting a potential upside of 51.62%. Given Marathon Petroleum’s higher probable upside, analysts plainly believe Marathon Petroleum is more favorable than BP Prudhoe Bay Royalty Trust.

Volatility & Risk

BP Prudhoe Bay Royalty Trust has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500.

Institutional & Insider Ownership

4.1% of BP Prudhoe Bay Royalty Trust shares are held by institutional investors. Comparatively, 79.2% of Marathon Petroleum shares are held by institutional investors. 1.1% of Marathon Petroleum shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Marathon Petroleum beats BP Prudhoe Bay Royalty Trust on 10 of the 16 factors compared between the two stocks.

About BP Prudhoe Bay Royalty Trust

BP Prudhoe Bay Royalty Trust operates as a grantor trust in the United States. The company holds overriding royalty interest comprising a non-operational interest in minerals in the Prudhoe Bay oil field located on the North Slope of Alaska. The Prudhoe Bay field extends approximately 12 miles by 27 miles and contains approximately 150,000 gross productive acres. As of December 31, 2017, its estimated proved reserves were 9.070 million barrels of oil and condensate of which 9.047 million barrels are proved developed reserves; and 0.023 million barrels are proved undeveloped reserves. BP Prudhoe Bay Royalty Trust was founded in 1989 and is based in Houston, Texas.

About Marathon Petroleum

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, Speedway, and Midstream. It refines crude oil and other feed stocks at its six refineries in the Gulf Coast and Midwest regions of the United States; and purchases refined products and ethanol for resale. Its refined products include gasoline, distillates, propane, feed stocks and special products, heavy fuel oil, and asphalt. It also sells transportation fuels and convenience products in the retail market through Speedway convenience stores; gathers, processes, and transports natural gas; gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs); and transports and stores crude oil and refined products. It markets its refined products to resellers, consumers, independent retailers, wholesale customers, its Marathon brand jobbers and Speedway brand convenience stores, airlines, transportation companies, and utilities. It also exports its refined products. As of December 31, 2017, it owned and operated 18 asphalt terminals and 61 light products terminals; 2,744 convenience stores in 21 states; 289 transport trucks and 296 trailers; 1,999 leased and 19 owned railcars; and owned/leased and operated 1,613 miles of common carrier crude oil and 2,360 miles of common carrier products pipelines, as well as had 5,617 retail outlets in 20 states and the District of Columbia, and interests in 2,194 miles of crude oil and 1,917 miles of products pipelines. It also owns and operates 228 miles of private products pipelines; has ownership interests in 739 miles of common carrier crude oil pipeline and 1,741 miles of products pipelines; and distributes refined products through approximately 130 light products and 2 asphalt third-party terminals. The company was incorporated in 2009 and is headquartered in Findlay, Ohio.

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