Fundamental Analysis
Marathon Petroleum Corporation is an American petrochemical company engaged in the refining, marketing, and transportation of petroleum products.
The company was part of Marathon Oil, but in 2011 the companies were spun off (spin-off).
Today, the headquarters are located in Findlay, Ohio. After the company bought competitor Andeavor, it became the largest oil producer in the U.S. with 16 refineries and daily production of more than three million barrels of crude oil
Marathon Petroleum is one of the Fortune 500 largest U.S. companies and its stock is included in the S&P 500 index.
The company’s earnings and sales are largely dependent on the price of oil and current margins. Like other petrochemical companies, Marathon Petroleum is a highly profitable company that shares its profits with investors through dividends. Further, the company buys back its shares.
The dividend is paid quarterly, and has been for more than 12 years in a row.
Turnover was $148 billion in 2023 and the same is expected this year. Net profit was USD 9.6 billion, and a profit of USD 7.9 billion is expected this year.
Results
Net profit was USD 937 million for the first quarter.
The company realized an equity buyback of USD 2.2 billion and a dividend of USD 299 million.
In addition, Marathon Petroleum increased its share buyback budget by another USD 5 billion. Thus, the company bought back USD 35 billion worth of its shares starting 2021.
Technical analysis
The stock had risen to USD 220, but has now fallen back.
Currently, the moving averages are approaching a crossover and thus the end of the uptrend. However, from a very long-term perspective, the share price is gradually rising, the slope of the 200-day moving average is de facto unchanged.
The RSI is in the neutral zone, even moving backwards a few weeks near the oversold line.
Conclusion
MPC may be one possible stock for investors looking for a long-term dividend investment. The company has solid economic results, growth and is poised to return capital to investors through share buybacks. This will even prevent the stock price from falling much.
On the other hand, the crossing of the moving averages into a sell signal is imminent. And this can send the share price to lower levels at least in the short term. Especially if the support at $158 per share doesn’t hold.