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Murphy Oil (MUR) to Gain on Cost Savings, High-Margin Assets

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Zacks Equity Research
·3 min read
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Murphy Oil Corporation’s MUR cost-saving initiatives, low-cost asset development and steady growth-driving activities in the United States and at international locations are likely to enhance its operating performance.

We recently issued an updated research report on this currently Zacks Rank #3 (Hold) company. The company has a trailing four-quarter earnings surprise of 25.26%, on average.

What’s Driving the Stock?

Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and the independent E&P group. The company is regularly pursuing developmental endeavors in the United States and at other international sites. It undertook cost-containment measures and has a target to lower its 2020 G&A expenses by 50% from the 2015 baseline.

Over the past several months, the company has been trying to transform its portfolio through strategic moves like acquisitions, divestitures and oil-weighted discoveries. Its focus on developing high-margin liquid assets is evident from its production mix. The company is maintaining a multi-basin portfolio of onshore and offshore assets for additional risk- reduction flexibility amid the fluctuating prices.

Moreover, it has a long history of shareholder value addition, courtesy of its steady cash flows. Since 2012, Murphy Oil has returned $3.9 billion to its shareholders through buybacks and dividend payouts. A consistent operational excellence enabled it to reward its shareholders through routine dividend payouts.

Woes

However, Murphy Oil operates in a highly competitive environment, which might dent its profitability. Also, stringent regulations and unfavorable foreign currency conversion rates are its near-term concerns.

Price Performance

Shares of Murphy Oil have rallied 10% in the past month, outperforming the industry’s 6.4% rise.

Stocks to Consider

A few better-ranked stocks in the same sector are Altus Midstream Company ALTM, Hess Midstream Partners LP HESM and DCP Midstream Partners, LP DCP, all sporting a Zacks #1 Rank (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altus Midstream delivered an earnings surprise of 264.31%, on average, in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has moved 46% north in the past 60 days.

Hess Midstream delivered an earnings surprise of 73.04%, on average, in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has moved 72.8% north in the past 60 days.

DCP Midstream delivered an earnings surprise of 13.576%, on average, in the trailing four quarters. The Zacks Consensus Estimate for 2021 earnings has been revised 33.1% upward in the past 60 days.

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Murphy Oil Corporation (MUR) : Free Stock Analysis Report
 
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
 
Hess Midstream Partners LP (HESM) : Free Stock Analysis Report
 
Altus Midstream Company (ALTM) : Free Stock Analysis Report
 
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