Opinions Jim Cramer - Mad Money
Marathon OilMRODON'T BUYApr 03, 2023
Jim Cramer - Mad MoneyUnknown
$26.33
Stock price when the opinion was issued
integrated oils
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BUY
Is up 33% the past 6 months. Just rebought it. Trades at a low 14x PE. Pays a 2% dividend, which has been increasing 15% the past 3 years. They buy back shares.
Kevin SimpsonOwned
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BUY
Among the 10 top performers on the S&P of 2021 #2, up 146%. Its success snuck up on him. But MRO does have capital discipline, which it didn't have before. It paid down debt and raised its dividend for the third straight quarter ever, but didn't increase its drilling budget. This despite strong cash flow and earmarked $2.5 billion share buybacks going forward. This could be a repeat winner in 2022.
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WEAK BUY
It's okay. It got an upgrade today and shares will probably go higher. He prefers Chevron, though.
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WAIT
He is a long-term believer in energy. North America is becoming more and more energy independent and owning North American energy companies is the right way to go. Crude potentially has more downside to go. Evaluation is starting to look compelling on a long-term basis. A little early.
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Trades at a low PE, but is a value trap and is highly cyclical. Their EPS leapt from $3.79 in 20167 to -$1.52 in 2020 to $26.63 last year! Up, down and up big. It's almost impossible to repeat 2022 numbers. Marathon has had a big share buyback. The dividend did grow a little. Today, shares are hitting 5-year highs. However, future 2025 EPS estimates are sliding to less than half of 2022's peaks, because of less demand for oil and gas. Also, the existential long-term obstacle are EV's. Consider the massive clean-energy incentives in Biden's 2022 IRA. It's possible earnings have already peaked--big warning.