CST Brands (NYSE: CST) and Murphy USA (NYSE:MUSA) are both energy companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Volatility and Risk

CST Brands has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Earnings & Valuation

This table compares CST Brands and Murphy USA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CST Brands N/A N/A N/A $4.04 12.01
Murphy USA $10.32 billion 0.24 $367.97 million $3.73 18.05

Murphy USA has higher revenue and earnings than CST Brands. CST Brands is trading at a lower price-to-earnings ratio than Murphy USA, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for CST Brands and Murphy USA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CST Brands 0 1 0 0 2.00
Murphy USA 0 3 1 0 2.25

CST Brands currently has a consensus target price of $49.00, suggesting a potential upside of 0.97%. Murphy USA has a consensus target price of $83.33, suggesting a potential upside of 23.81%. Given Murphy USA’s stronger consensus rating and higher probable upside, analysts plainly believe Murphy USA is more favorable than CST Brands.

Profitability

This table compares CST Brands and Murphy USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CST Brands -0.11% 0.97% -0.28%
Murphy USA 1.15% 20.19% 6.78%

Dividends

CST Brands pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Murphy USA does not pay a dividend. CST Brands pays out 1.5% of its earnings in the form of a dividend.

Insider & Institutional Ownership

85.7% of CST Brands shares are held by institutional investors. Comparatively, 97.9% of Murphy USA shares are held by institutional investors. 2.1% of CST Brands shares are held by insiders. Comparatively, 7.3% of Murphy USA shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Murphy USA beats CST Brands on 10 of the 13 factors compared between the two stocks.

About CST Brands

CST Brands LLC, formerly CST Brands, Inc., is a holding company. The Company is an independent retail of motor fuel and convenience merchandise in the United States and eastern Canada. Its segments include U.S. Retail, Canadian Retail and CrossAmerica. As of December 31, 2016, its U.S. Retail segment had 1,167 Company-operated retail sites located in Arkansas, Arizona, Colorado, Florida, Georgia, Louisiana, New Mexico, New York, Oklahoma and Texas. As of December 31, 2016, its Canadian Retail segment had 884 retail sites located in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Quebec. As of December 31, 2016, its CrossAmerica segment had 1,187 distribution sites located in 29 states, which consisted of 403 independent dealer sites, 153 sites operated by Dunne Manning Stores LLC, 420 sites operated by lessee dealers, 95 commission sites, 73 CrossAmerica Partners LP Company-operated retail sites and 43 CST Company-operated retail sites.

About Murphy USA

Murphy USA Inc. is engaged in the marketing of retail motor fuel products and merchandise through a chain of retail stores. The Company operates through the Marketing segment. The Marketing segment includes its retail marketing sites and product supply, and wholesale assets. As of December 31, 2016, its retail stores were located in 26 states, primarily in the Southwest, Southeast and Midwest the United States. Out of the total 1,401 stores, 1,152 were branded Murphy USA and 249 were Murphy Express locations, as of December 31, 2016. Its retail stores under the brand name Murphy USA participate in the Walmart discount program. The Walmart discount program offers a cents-off per gallon purchased for fuel when using specific payment methods as decided by Walmart and the Company. Its business also includes product supply and wholesale assets, including product distribution terminals and pipeline positions.

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