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Marathon Petroleum to Buy Noco Express' Terminal & Stores

Zacks Equity Research

Marathon Petroleum Corporation MPC recently inked a definitive purchase agreement with NOCO Incorporated, agreeing to acquire a light-product and asphalt terminal with 900,000-barrel capacity and 33 Noco Express retail stores in Buffalo, New York.

This deal is in line with the Findlay, OH-based refining and marketing company’s Midwest product placement strategy. It complements the company’s prior investments to maximize refinery utilization. The acquisition will also be a boon to its subsidiary, Speedway LLC’s buy off of western New York 78 Express Mart locations. The acquisition of 33 out of NOCO’s 39 stores will further expand the company’s presence in the western New York.

The acquired terminal, located in Tonawanda, is strategically positioned to receive supply from several sources, including the Midwest, Canada. The buyout boosts the company’s integrated platform. The integrated platform of the retail segment enables Marathon Petroleum to capture terminal-to-store margin, bypassing jobbers and wholesale clients.

The company operates the largest refining system in the country. It has more than 3 million barrels per day of crude oil capacity. Its marketing system includes around 7,800 branded locations across the country, including almost 5,600 Marathon-brand retail outlets. Notably, Speedway owns and operates around 4,000 retail convenience stores in the country.

Price Performance

Marathon Petroleum has lost 20.5% in the past year, compared with 20.1% collective decline of the industry it belongs to.

Zacks Rank and Stocks to Consider

Currently, Marathon Petroleum has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below:

Denver, CO-based Antero Resources Corporation AR is an upstream energy company. In 2019, the company’s top line is expected to increase nearly 5% year over year. The stock currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Calgary, Canada-based TransCanada Corporation TRP is a midstream energy company. In the trailing four quarters, it delivered average positive earnings surprise of 19%. The stock currently has a Zacks Rank #2 (Buy).

Houston, TX-based Altus Midstream Company ALTM is also midstream energy company. In 2019, its top line is expected to increase more than 300% year over year. The stock currently has a Zacks Rank #2.

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Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
 
TransCanada Corporation (TRP) : Free Stock Analysis Report
 
Antero Resources Corporation (AR) : Free Stock Analysis Report
 
Altus Midstream Company (ALTM) : Free Stock Analysis Report
 
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