Murphy USA (NYSE:MUSA) vs. Asbury Automotive Group (NYSE:ABG) Critical Analysis

Asbury Automotive Group (NYSE:ABG) and Murphy USA (NYSE:MUSA) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Asbury Automotive Group and Murphy USA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asbury Automotive Group	2	5	3	0	2.10
Murphy USA	0	5	6	0	2.55

Asbury Automotive Group presently has a consensus target price of $220.88, suggesting a potential upside of 6.83%. Murphy USA has a consensus target price of $606.33, suggesting a potential upside of 17.99%. Given Murphy USA’s stronger consensus rating and higher probable upside, analysts clearly believe Murphy USA is more favorable than Asbury Automotive Group.

Risk & Volatility

Asbury Automotive Group has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500.

Insider & Institutional Ownership

80.8% of Murphy USA shares are held by institutional investors. 0.7% of Asbury Automotive Group shares are held by company insiders. Comparatively, 9.0% of Murphy USA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Asbury Automotive Group and Murphy USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asbury Automotive Group	2.66%	11.94%	4.08%
Murphy USA	2.85%	96.37%	13.56%

Valuation & Earnings

This table compares Asbury Automotive Group and Murphy USA”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asbury Automotive Group	$18.00 billion	0.21	$492.00 million	$25.06	8.25
Murphy USA	$23.26 billion	0.41	$470.60 million	$35.67	14.41

Asbury Automotive Group has higher earnings, but lower revenue than Murphy USA. Asbury Automotive Group is trading at a lower price-to-earnings ratio than Murphy USA, indicating that it is currently the more affordable of the two stocks.

Summary

Murphy USA beats Asbury Automotive Group on 12 of the 14 factors compared between the two stocks.

About Asbury Automotive Group

Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services. The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and disability and accident insurance. Asbury Automotive Group, Inc. was founded in 1996 and is based in Duluth, Georgia.

About Murphy USA

Murphy USA Inc. engages in marketing of retail motor fuel products and convenience merchandise. The company operates retail stores under the Murphy USA, Murphy Express, and QuickChek brands, as well as operates non-fuel convenience stores. It operates retail gasoline stores principally in the Southeast, Southwest, and Midwest United States. Murphy USA Inc. was founded in 1996 and is headquartered in El Dorado, Arkansas.