The year 2011 started out with Marathon Oil (MRO) spinning off its midstream and downstream operations under the name Marathon Petroleum Corp. (MPC). Marathon Oil was well-placed as an exploration and production company to take advantage of high crude oil prices. However, when prices peaked in mid-2014, it was Marathon Petroleum’s turn to take advantage of buying low-price oil for its refinery operations, which resulted in increased profit margins.

In the five years since its spin-off, MPC has gone through major restructuring. It is currently the third-largest refiner in the United States, with seven refineries that supply a variety of petroleum products, ethanol and natural gas to wholesale and retail outlets located primarily east of the Mississippi River. Marathon sells its branded gasoline throughout 19 states. Approximately 5,400 independently owned gas stations and 2,770 Speedway convenience stores make up its retail segment, with Speedway ranking as the second-largest convenience store chain in the country.

During the last year, Marathon Petroleum has attracted the attention of institutional investors that own nearly 80% of the outstanding stock; among them are known activist investors Barry Rosenstein of Jana Partners and Keith Meister of Corvex Management. (See also: Marathon Petroleum Corporation: An Activist Investment Analysis)

Marathon will announce its Q3 2016 earnings on Oct. 27 before the market opens and will hold a conference call later that day. During the last four weeks, three of nine stock analysts have increased their earnings estimates. The range of estimates currently stands at a high of $1.04 and $0.42 on the low side. Consensus is $0.76 per share. In June, Q2 earnings were reported at $1.07 per share.

On Sept. 12, MPC paid a cash dividend of $0.36, which represents a 3.41% yield. On Thursday, MPC closed at $42.36 on below-average volume. Its 52-week range is $29.24 to $59.99 per share. Eight out of fourteen analysts rate the stock a Strong Buy, there is one Buy rating, four Holds and one Sell, with a consensus target price of $48 a share within the next year.

 

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