Murphy's USA (MUSA) earnings review for the 2nd quarter of their 2021 fiscal year
Category: Stock Market and Murphy's USA (MUSA)
Date: 29 July 2020 Stock Price of Murphy's : $147.93 Market Capital of Murphy's: $3.98 billion We take a look at the 2nd quarter earnings report of their 202`1 fiscal year of Murphy's USA (MUSA), one of the largest independent retailers of gasoline products and convenience store merchandise with over 1,400 locations in 26 states across the Southern and Midwestern United States. Revenues reported came in at $4.46 billion and net income for the quarter came in at $128.8 million
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We delivered strong second quarter results, despite an operating environment that was the most challenging in our company's history - President and CEO Andrew Clyde"
About Murphy's USA
Murphy USA is one of the largest independent retailers of gasoline products and convenience store merchandise with over 1,400 locations in 26 states across the Southern and Midwestern United States. Our stores are 100% company operated and 90% company owned; most are adjacent to Walmart stores. Murphy USA serves approximately 1.6 million customers per day. Our business includes a network of seven owned terminals which support an advantaged fuel supply allowing the company to source fuel at or below the industry benchmark prices.
Overview of Murphy's USA 2nd quarter 2020 earnings report
Key Highlights:
- Net income was $128.8 million, or $4.79 per diluted share, in Q2 2021 compared to net income of $168.9 million, or $5.73 per diluted share, in Q2 2020
- Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including RINs) for Q2 2021 was 28.2 cpg, compared to 38.3 cpg in Q2 2020
- Total retail gallons increased 32.6% in Q2 2021 compared to Q2 2020, while volumes on a same store sales ("SSS") basis increased 22.4%
- Merchandise contribution dollars increased 55.8% to $184.5 million compared to the prior-year quarter, on average unit margins of 19.2% in the current quarter, enhanced by the QuickChek acquisition
- Food and beverage contribution margin increased significantly to 15.2% of total merchandise contribution dollars compared to 0.8% in the prior year period due to the inclusion of QuickChek in the current period
- During Q2 2021, the Company opened 3 new Murphy Express stores and closed 1 QuickChek store. There are 9 new Murphy Express sites, 6 new QuickChek sites, and 14 raze-and-rebuild Murphy USA sites currently under construction
- Common shares repurchased during Q2 2021 were approximately 1.1 million for $148.3 million at an average price of $136.58 per share
Murphy's management commentary on their 2nd quarter 2020 earnings report
El Dorado, Arkansas, July 28, 2021 (BUSINESS WIRE) – Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced financial results for the three and six months ended June 30, 2021
“We delivered strong second quarter results, despite an operating environment that was the most challenging in our company's history," said President and CEO Andrew Clyde. “Supply chain issues, labor shortages, and Colonial pipeline interruptions were just a few of the challenges around which our teams were forced to navigate and overcome. Nevertheless, results were resilient despite these challenges and underpinned by strong fundamentals, including a recovery in attached merchandise categories as customer transactions and fuel volumes trended higher in June, coupled with robust all-in fuel margins despite another quarter of rising product prices. Second quarter results were also noteworthy against the strength of the prior year comparison, and highlight the advantage of our low-cost, high volume business model, which differentiates our performance potential and better positions Murphy USA to compete and win in a challenging environment."
“We delivered strong second quarter results, despite an operating environment that was the most challenging in our company's history," said President and CEO Andrew Clyde. “Supply chain issues, labor shortages, and Colonial pipeline interruptions were just a few of the challenges around which our teams were forced to navigate and overcome. Nevertheless, results were resilient despite these challenges and underpinned by strong fundamentals, including a recovery in attached merchandise categories as customer transactions and fuel volumes trended higher in June, coupled with robust all-in fuel margins despite another quarter of rising product prices. Second quarter results were also noteworthy against the strength of the prior year comparison, and highlight the advantage of our low-cost, high volume business model, which differentiates our performance potential and better positions Murphy USA to compete and win in a challenging environment."
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At June 30, 2021, the Company had common shares outstanding of 25,845,040. Common shares repurchased under the $500 million share repurchase program approved in November 2020 were approximately 1.1 million for $148.3 million in the current quarter. Common shares purchased for the six months ended June 30, 2021, were 1.5 million shares for a total of $198.3 million, approximately $176.7 million remains in the share repurchase plan at June 30, 2021. The effective income tax rate for Q2 2021 was 24.2% compared to 24.3% in Q2 2020.
The Company paid a quarterly dividend of $0.25 per share, or $1.00 per share on an annualized basis, on June 1, 2021, for a total cash payment of $6.7 million. 2021 Guidance Update The Company has continued its strong performance into 2021 despite very challenging macro conditions in the marketplace. While management has not historically made a practice of updating guidance throughout the year, there are several metrics that were previously provided for the 2021 year in January that need to be revised based on updated conditions.
The Company paid a quarterly dividend of $0.25 per share, or $1.00 per share on an annualized basis, on June 1, 2021, for a total cash payment of $6.7 million. 2021 Guidance Update The Company has continued its strong performance into 2021 despite very challenging macro conditions in the marketplace. While management has not historically made a practice of updating guidance throughout the year, there are several metrics that were previously provided for the 2021 year in January that need to be revised based on updated conditions.
Murphy's USA (MUSA) stock price chart for the last 5 years
The image below shows the stock price history of Murphy's over the last 5 years. And it's been a very good time for Murphy's stockholders. The stock has provided a strong return of 101.4% Murphy's stockholders over the last 5 years
The stock of Murphy's is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum towards Murphy's stock is very positive at this point in time.
The stock of Murphy's is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum towards Murphy's stock is very positive at this point in time.
Murphy's (MUSA) stock vs Casey (CASY) stock over the last 5 years
The image below shows the stock price performance of Murphy's (MUSA) stock vs Casey (CASY) over the last 5 years. These to firms are direct rivals in the fuel and gasoline services sector. The summary below shows the stock price performance of Murphy's (MUSA) stock vs Casey (CASY) over the last 5 years
So the stock of Murphy's (MUSA) has easily outperformed the stock of Casey (CASY) over the last 2 years.
- Murphy's: 101.4%
- Casey's: 48.2%
So the stock of Murphy's (MUSA) has easily outperformed the stock of Casey (CASY) over the last 2 years.
Murphy's USA (MUSA) latest stock valuation
So what is Murphy's stock worth based on the release of their 2nd quarter 2021 earnings report ? Based on Murphy's latest earnings report our valuation models provide a target price (full value price) for Murphy's stock at $147.70 a stock. Based on our target price (full value price) we believe the stock of Murphy's is fully valued
We usually recommend that long term fundamental or value investors look to enter the stock at 10% below our target price (full value price) which in this case is $147.70, so a good entry point into Murphy's' stock would be at $132.90 or below. We expect the stock of Murphy's (MUSA) to trade in a narrow range around its current price in coming weeks and months.
We usually recommend that long term fundamental or value investors look to enter the stock at 10% below our target price (full value price) which in this case is $147.70, so a good entry point into Murphy's' stock would be at $132.90 or below. We expect the stock of Murphy's (MUSA) to trade in a narrow range around its current price in coming weeks and months.
Next earnings release of Murphy's USA (MUSA)
It is expected that Murphy's USA (MUSA) will release their 3rd quarter 2021 earnings report in late October 2020