01. Marathon Petroleum Corporation (NYSE:MPC)
Number of Hedge Fund Holders: 50
Marathon Petroleum Corporation (NYSE:MPC) is a major player in the oil refining industry, and its strong position in the refining and marketing segment makes it a compelling addition to the list of oil refinery stocks. The company operates refineries across key U.S. regions, including the Gulf Coast, Mid-Continent, and West Coast. It refines crude oil into transportation fuels, petrochemicals, and other refined products. With its strategic geographical footprint, Marathon Petroleum Corporation (NYSE:MPC) has access to diverse markets and logistical networks, positioning it to capture strong margins and respond effectively to changing market dynamics.
Marathon Petroleum Corporation (NYSE:MPC) second quarter 2024 earnings report highlighted its solid financial performance, driven by high refining utilization rates and steady demand for refined products like gasoline, diesel, and jet fuel. The company reported adjusted earnings per share (EPS) of $4.12, surpassing market expectations of $3.09. This robust performance was underpinned by refining margins and cost efficiencies, which contributed to an adjusted EBITDA of $2 billion in the Refining & Marketing segment.
One of the key metrics demonstrating Marathon Petroleum Corporation (NYSE:MPC) strength is its refining utilization rate, which stood at 97% in Q2 2024. This high utilization rate allowed the company to process nearly 2.9 million barrels of crude oil per day, positioning it as a leader in the refining sector. Additionally, Marathon Petroleum Corporation (NYSE:MPC) refining operating costs were $4.97 per barrel, with the U.S. Gulf Coast region achieving even lower costs of $3.73 per barrel, showcasing the firm’s cost competitiveness.
The Midstream segment, primarily comprised of MPLX, also delivered strong cash flows, with $550 million in quarterly distributions to Marathon. This cash flow supports Marathon Petroleum Corporation (NYSE:MPC) capital return strategy, as the company repurchased $3.2 billion in shares during the quarter. Marathon’s disciplined approach to capital investment, focusing on high-return projects in refining and midstream, is expected to drive continued growth and value for shareholders.
Given its operational excellence, strategic investments, and strong financial performance, Marathon Petroleum Corporation (NYSE:MPC) is well-positioned to lead its peers in capital returns and deliver long-term value, making it a top choice among oil refinery stocks.
While we acknowledge the potential of MPC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MPC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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