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

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

Profitability

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

Institutional & Insider Ownership

89.8% of DICK’S Sporting Goods shares are held by institutional investors. Comparatively, 80.8% of Murphy USA shares are held by institutional investors. 28.9% of DICK’S Sporting Goods 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 large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for DICK’S Sporting Goods and Murphy USA, as provided by MarketBeat.

DICK’S Sporting Goods currently has a consensus target price of $167.20, indicating a potential upside of 23.64%. Murphy USA has a consensus target price of $606.89, indicating a potential upside of 16.02%. Given DICK’S Sporting Goods’ higher possible upside, equities research analysts clearly believe DICK’S Sporting Goods is more favorable than Murphy USA.

Valuation & Earnings

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

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

Volatility and Risk

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

Dividends

DICK’S Sporting Goods pays an annual dividend of $5.00 per share and has a dividend yield of 3.7%. Murphy USA pays an annual dividend of $2.60 per share and has a dividend yield of 0.5%. DICK’S Sporting Goods pays out 53.7% of its earnings in the form of a dividend. Murphy USA pays out 7.9% 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. DICK’S Sporting Goods has increased its dividend for 11 consecutive years and Murphy USA has increased its dividend for 4 consecutive years. DICK’S Sporting Goods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

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

About DICK’S Sporting Goods

(Get Free Report)

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.

About Murphy USA

(Get Free Report)

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.