Contrasting Murphy USA (NYSE:MUSA) & DICK’S Sporting Goods (NYSE:DKS)

Murphy USA (NYSE:MUSA) and DICK’S Sporting Goods (NYSE:DKS) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

80.8% of Murphy USA shares are owned by institutional investors. Comparatively, 89.8% of DICK’S Sporting Goods shares are owned by institutional investors. 9.0% of Murphy USA shares are owned by company insiders. Comparatively, 28.9% of DICK’S Sporting Goods shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Murphy USA pays an annual dividend of $2.60 per share and has a dividend yield of 0.5%. DICK’S Sporting Goods pays an annual dividend of $5.00 per share and has a dividend yield of 4.1%. Murphy USA pays out 7.9% of its earnings in the form of a dividend. DICK’S Sporting Goods pays out 53.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Murphy USA has increased its dividend for 4 consecutive years and DICK’S Sporting Goods has increased its dividend for 11 consecutive years. DICK’S Sporting Goods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Murphy USA and DICK’S Sporting Goods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murphy USA	2.87%	96.01%	12.95%
DICK’S Sporting Goods	3.97%	19.21%	6.07%

Volatility & Risk

Murphy USA has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500. Comparatively, DICK’S Sporting Goods has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Murphy USA and DICK’S Sporting Goods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy USA	0	6	5	0	2.45
DICK’S Sporting Goods	3	9	11	0	2.35

Murphy USA presently has a consensus price target of $606.89, indicating a potential upside of 15.24%. DICK’S Sporting Goods has a consensus price target of $167.20, indicating a potential upside of 37.85%. Given DICK’S Sporting Goods’ higher probable upside, analysts clearly believe DICK’S Sporting Goods is more favorable than Murphy USA.

Earnings & Valuation

This table compares Murphy USA and DICK’S Sporting Goods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy USA	$19.38 billion	0.50	$470.60 million	$32.84	16.04
DICK’S Sporting Goods	$17.22 billion	0.63	$849.24 million	$9.31	13.03

DICK’S Sporting Goods has lower revenue, but higher earnings than Murphy USA. DICK’S Sporting Goods 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

DICK’S Sporting Goods beats Murphy USA on 10 of the 17 factors compared between the two stocks.

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.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.