MAGELLAN MIDSTREAM PARTNERS (MMP) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:MMP • US5590801065

69 USD
+0.46 (+0.67%)
At close: Sep 22, 2023
69.01 USD
+0.01 (+0.01%)
After Hours: 9/22/2023, 8:13:22 PM
Fundamental Rating

4

Taking everything into account, MMP scores 4 out of 10 in our fundamental rating. MMP was compared to 207 industry peers in the Oil, Gas & Consumable Fuels industry. There are concerns on the financial health of MMP while its profitability can be described as average. MMP is valied quite expensively at the moment, while it does show a decent growth rate. Finally MMP also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

4

1. Profitability

1.1 Basic Checks

  • In the past year MMP was profitable.
  • MMP had a positive operating cash flow in the past year.
MMP Yearly Net Income VS EBIT VS OCF VS FCFMMP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M 800M 1B

1.2 Ratios

  • MMP's Return On Assets of 13.50% is fine compared to the rest of the industry. MMP outperforms 61.75% of its industry peers.
  • MMP has a better Return On Equity (60.05%) than 88.48% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 13.04%, MMP is in line with its industry, outperforming 54.84% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for MMP is significantly below the industry average of 21.94%.
  • The last Return On Invested Capital (13.04%) for MMP is above the 3 year average (10.07%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 13.5%
ROE 60.05%
ROIC 13.04%
ROA(3y)11.88%
ROA(5y)12.99%
ROE(3y)49.55%
ROE(5y)47.34%
ROIC(3y)10.07%
ROIC(5y)10.4%
MMP Yearly ROA, ROE, ROICMMP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 20 40 60

1.3 Margins

  • MMP has a Profit Margin of 29.55%. This is in the better half of the industry: MMP outperforms 64.06% of its industry peers.
  • In the last couple of years the Profit Margin of MMP has remained more or less at the same level.
  • Looking at the Operating Margin, with a value of 32.92%, MMP is in line with its industry, outperforming 52.07% of the companies in the same industry.
  • MMP's Operating Margin has declined in the last couple of years.
  • MMP has a Gross Margin (48.28%) which is comparable to the rest of the industry.
  • MMP's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 32.92%
PM (TTM) 29.55%
GM 48.28%
OM growth 3Y-7.86%
OM growth 5Y-4.63%
PM growth 3Y-4.7%
PM growth 5Y-1.36%
GM growth 3Y-4.92%
GM growth 5Y-2.39%
MMP Yearly Profit, Operating, Gross MarginsMMP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 10 20 30 40 50

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2

2. Health

2.1 Basic Checks

  • MMP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
  • Compared to 1 year ago, MMP has less shares outstanding
  • MMP has a worse debt/assets ratio than last year.
MMP Yearly Shares OutstandingMMP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 50M 100M 150M 200M
MMP Yearly Total Debt VS Total AssetsMMP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2B 4B 6B 8B

2.2 Solvency

  • MMP has a debt to FCF ratio of 3.79. This is a good value and a sign of high solvency as MMP would need 3.79 years to pay back of all of its debts.
  • MMP has a Debt to FCF ratio (3.79) which is in line with its industry peers.
  • A Debt/Equity ratio of 2.91 is on the high side and indicates that MMP has dependencies on debt financing.
  • MMP has a Debt to Equity ratio of 2.91. This is amonst the worse of the industry: MMP underperforms 84.79% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.91
Debt/FCF 3.79
Altman-Z N/A
ROIC/WACC1.54
WACC8.46%
MMP Yearly LT Debt VS Equity VS FCFMMP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B 4B 5B

2.3 Liquidity

  • MMP has a Current Ratio of 1.08. This is a normal value and indicates that MMP is financially healthy and should not expect problems in meeting its short term obligations.
  • Looking at the Current ratio, with a value of 1.08, MMP is in line with its industry, outperforming 44.70% of the companies in the same industry.
  • MMP has a Quick Ratio of 1.08. This is a bad value and indicates that MMP is not financially healthy enough and could expect problems in meeting its short term obligations.
  • With a Quick ratio value of 0.60, MMP is not doing good in the industry: 76.96% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.08
Quick Ratio 0.6
MMP Yearly Current Assets VS Current LiabilitesMMP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M 800M

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4

3. Growth

3.1 Past

  • The Earnings Per Share has been growing slightly by 7.49% over the past year.
  • The Earnings Per Share has been growing slightly by 5.82% on average over the past years.
  • MMP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.66%.
  • The Revenue has been growing slightly by 5.00% on average over the past years.
EPS 1Y (TTM)7.49%
EPS 3Y3.54%
EPS 5Y5.82%
EPS Q2Q%-29.34%
Revenue 1Y (TTM)19.66%
Revenue growth 3Y5.47%
Revenue growth 5Y5%
Sales Q2Q%11.24%

3.2 Future

  • The Earnings Per Share is expected to grow by 4.58% on average over the next years.
  • Based on estimates for the next years, MMP will show a small growth in Revenue. The Revenue will grow by 4.20% on average per year.
EPS Next Y4.81%
EPS Next 2Y3.83%
EPS Next 3Y3.33%
EPS Next 5Y4.58%
Revenue Next Year12.86%
Revenue Next 2Y7.1%
Revenue Next 3Y5.56%
Revenue Next 5Y4.2%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
MMP Yearly Revenue VS EstimatesMMP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 1B 2B 3B
MMP Yearly EPS VS EstimatesMMP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 4 6

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3

4. Valuation

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 13.75, MMP is valued correctly.
  • 64.52% of the companies in the same industry are cheaper than MMP, based on the Price/Earnings ratio.
  • The average S&P500 Price/Earnings ratio is at 28.32. MMP is valued rather cheaply when compared to this.
  • The Price/Forward Earnings ratio is 12.93, which indicates a correct valuation of MMP.
  • MMP's Price/Forward Earnings ratio is in line with the industry average.
  • When comparing the Price/Forward Earnings ratio of MMP to the average of the S&P500 Index (25.57), we can say MMP is valued slightly cheaper.
Industry RankSector Rank
PE 13.75
Fwd PE 12.93
MMP Price Earnings VS Forward Price EarningsMMP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, MMP is valued a bit more expensive than the industry average as 73.73% of the companies are valued more cheaply.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of MMP is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 10.6
EV/EBITDA 13.08
MMP Per share dataMMP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MMP does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.86
PEG (5Y)2.36
EPS Next 2Y3.83%
EPS Next 3Y3.33%

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8

5. Dividend

5.1 Amount

  • With a Yearly Dividend Yield of 6.07%, MMP is a good candidate for dividend investing.
  • MMP's Dividend Yield is a higher than the industry average which is at 3.64.
  • MMP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.
Industry RankSector Rank
Dividend Yield 6.07%

5.2 History

  • The dividend of MMP has a limited annual growth rate of 3.51%.
  • MMP has paid a dividend for at least 10 years, which is a reliable track record.
  • MMP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.51%
Div Incr Years16
Div Non Decr Years16
MMP Yearly Dividends per shareMMP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 1 2 3 4

5.3 Sustainability

  • MMP pays out 83.00% of its income as dividend. This is not a sustainable payout ratio.
  • The dividend of MMP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP83%
EPS Next 2Y3.83%
EPS Next 3Y3.33%
MMP Yearly Income VS Free CF VS DividendMMP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M 800M 1B
MMP Dividend Payout.MMP Dividend Payout, showing the Payout Ratio.MMP Dividend Payout.PayoutRetained Earnings

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MAGELLAN MIDSTREAM PARTNERS / MMP FAQ

What is the fundamental rating for MMP stock?

ChartMill assigns a fundamental rating of 4 / 10 to MMP.


What is the valuation status of MAGELLAN MIDSTREAM PARTNERS (MMP) stock?

ChartMill assigns a valuation rating of 3 / 10 to MAGELLAN MIDSTREAM PARTNERS (MMP). This can be considered as Overvalued.


Can you provide the profitability details for MAGELLAN MIDSTREAM PARTNERS?

MAGELLAN MIDSTREAM PARTNERS (MMP) has a profitability rating of 6 / 10.


What is the valuation of MAGELLAN MIDSTREAM PARTNERS based on its PE and PB ratios?

The Price/Earnings (PE) ratio for MAGELLAN MIDSTREAM PARTNERS (MMP) is 13.75 and the Price/Book (PB) ratio is 8.13.


What is the expected EPS growth for MAGELLAN MIDSTREAM PARTNERS (MMP) stock?

The Earnings per Share (EPS) of MAGELLAN MIDSTREAM PARTNERS (MMP) is expected to grow by 4.81% in the next year.