W&T Offshore (WTI) & Marathon Oil (MRO) Critical Analysis

W&T Offshore (NYSE:WTI) and Marathon Oil (NYSE:MRO) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Risk and Volatility

W&T Offshore has a beta of 2.83, indicating that its stock price is 183% more volatile than the S&P 500. Comparatively, Marathon Oil has a beta of 2.27, indicating that its stock price is 127% more volatile than the S&P 500.



Insider and Institutional Ownership

66.3% of W&T Offshore shares are owned by institutional investors. Comparatively, 81.0% of Marathon Oil shares are owned by institutional investors. 33.8% of W&T Offshore shares are owned by insiders. Comparatively, 0.5% of Marathon Oil shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares W&T Offshore and Marathon Oil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W&T Offshore 23.54% -26.51% 14.14%
Marathon Oil 10.94% 4.47% 2.46%

Dividends

Marathon Oil pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. W&T Offshore does not pay a dividend. Marathon Oil pays out -52.6% of its earnings in the form of a dividend. W&T Offshore has increased its dividend for 7 consecutive years.

Earnings and Valuation

This table compares W&T Offshore and Marathon Oil’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
W&T Offshore $487.10 million 1.51 $79.68 million $0.56 9.41
Marathon Oil $4.77 billion 2.81 -$5.72 billion ($0.38) -42.39

W&T Offshore has higher earnings, but lower revenue than Marathon Oil. Marathon Oil is trading at a lower price-to-earnings ratio than W&T Offshore, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for W&T Offshore and Marathon Oil, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W&T Offshore 2 0 2 0 2.00
Marathon Oil 0 6 14 0 2.70

W&T Offshore currently has a consensus price target of $8.50, suggesting a potential upside of 61.29%. Marathon Oil has a consensus price target of $24.34, suggesting a potential upside of 51.10%. Given W&T Offshore’s higher probable upside, analysts clearly believe W&T Offshore is more favorable than Marathon Oil.

Summary

W&T Offshore beats Marathon Oil on 9 of the 17 factors compared between the two stocks.

About W&T Offshore

W&T Offshore, Inc., an independent oil and natural gas producer, acquires, explores for, and develops oil and natural gas properties in the Gulf of Mexico. The company sells crude oil, natural gas liquids, and natural gas. It holds working interests in approximately 49 offshore fields in federal and state waters. The company also owns interests in approximately 135 offshore structures. It has interests in offshore leases covering approximately 370,000 net acres spanning across the Outer Continental Shelf off the coasts of Louisiana, Texas, Mississippi, and Alabama. As of December 31, 2017, its total proved reserves were 74.2 million barrels of oil equivalent. W&T Offshore, Inc. was founded in 1983 and is headquartered in Houston, Texas.

About Marathon Oil

Marathon Oil Corporation operates as an energy company in the United States, Equatorial Guinea, the United Kingdom, and Libya. It operates in two segments, United States E&P and International E&P. 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. As of December 31, 2017, it had estimated proved developed reserves totaling 903 million barrels of oil equivalent (mmboe); and estimated proved undeveloped reserves totaling 546 mmboe. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in July 2001. Marathon Oil Corporation was founded in 1887 and is headquartered in Houston, Texas.

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