Intrinsic value of Murphy Oil - MUR

Previous Close

$31.71

  Intrinsic Value

$6.68

stock screener

  Rating & Target

str. sell

-79%

Previous close

$31.71

 
Intrinsic value

$6.68

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of MUR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.90
  21.11
  19.50
  18.05
  16.74
  15.57
  14.51
  13.56
  12.71
  11.93
  11.24
  10.62
  10.06
  9.55
  9.09
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.84
Revenue, $m
  2,735
  3,312
  3,958
  4,672
  5,454
  6,303
  7,218
  8,197
  9,238
  10,341
  11,503
  12,725
  14,004
  15,342
  16,737
  18,191
  19,704
  21,277
  22,913
  24,612
  26,379
  28,214
  30,122
  32,106
  34,170
  36,317
  38,553
  40,882
  43,309
  45,840
Variable operating expenses, $m
  3,350
  4,057
  4,848
  5,723
  6,681
  7,722
  8,842
  10,041
  11,317
  12,668
  14,092
  15,588
  17,155
  18,794
  20,503
  22,284
  24,137
  26,064
  28,068
  30,150
  32,314
  34,562
  36,900
  39,330
  41,858
  44,489
  47,228
  50,081
  53,054
  56,154
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,350
  4,057
  4,848
  5,723
  6,681
  7,722
  8,842
  10,041
  11,317
  12,668
  14,092
  15,588
  17,155
  18,794
  20,503
  22,284
  24,137
  26,064
  28,068
  30,150
  32,314
  34,562
  36,900
  39,330
  41,858
  44,489
  47,228
  50,081
  53,054
  56,154
Operating income, $m
  -615
  -745
  -890
  -1,051
  -1,227
  -1,418
  -1,624
  -1,844
  -2,079
  -2,327
  -2,588
  -2,863
  -3,151
  -3,452
  -3,766
  -4,093
  -4,433
  -4,787
  -5,155
  -5,538
  -5,935
  -6,348
  -6,777
  -7,224
  -7,688
  -8,171
  -8,674
  -9,199
  -9,745
  -10,314
EBITDA, $m
  401
  486
  580
  685
  800
  924
  1,058
  1,202
  1,354
  1,516
  1,686
  1,865
  2,053
  2,249
  2,454
  2,667
  2,889
  3,119
  3,359
  3,608
  3,867
  4,136
  4,416
  4,707
  5,009
  5,324
  5,652
  5,993
  6,349
  6,720
Interest expense (income), $m
  128
  180
  254
  338
  432
  536
  650
  774
  907
  1,050
  1,202
  1,362
  1,531
  1,709
  1,896
  2,091
  2,294
  2,506
  2,726
  2,955
  3,193
  3,441
  3,698
  3,966
  4,243
  4,532
  4,833
  5,146
  5,472
  5,811
  6,164
Earnings before tax, $m
  -795
  -999
  -1,229
  -1,483
  -1,764
  -2,069
  -2,398
  -2,752
  -3,128
  -3,528
  -3,950
  -4,395
  -4,860
  -5,348
  -5,856
  -6,387
  -6,939
  -7,513
  -8,110
  -8,731
  -9,376
  -10,046
  -10,743
  -11,467
  -12,221
  -13,004
  -13,820
  -14,670
  -15,555
  -16,478
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -795
  -999
  -1,229
  -1,483
  -1,764
  -2,069
  -2,398
  -2,752
  -3,128
  -3,528
  -3,950
  -4,395
  -4,860
  -5,348
  -5,856
  -6,387
  -6,939
  -7,513
  -8,110
  -8,731
  -9,376
  -10,046
  -10,743
  -11,467
  -12,221
  -13,004
  -13,820
  -14,670
  -15,555
  -16,478

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,941
  14,462
  17,282
  20,401
  23,817
  27,525
  31,520
  35,795
  40,342
  45,157
  50,234
  55,567
  61,155
  66,995
  73,088
  79,436
  86,042
  92,913
  100,055
  107,477
  115,190
  123,206
  131,538
  140,201
  149,213
  158,591
  168,355
  178,525
  189,124
  200,175
Adjusted assets (=assets-cash), $m
  11,941
  14,462
  17,282
  20,401
  23,817
  27,525
  31,520
  35,795
  40,342
  45,157
  50,234
  55,567
  61,155
  66,995
  73,088
  79,436
  86,042
  92,913
  100,055
  107,477
  115,190
  123,206
  131,538
  140,201
  149,213
  158,591
  168,355
  178,525
  189,124
  200,175
Revenue / Adjusted assets
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
Average production assets, $m
  10,161
  12,307
  14,706
  17,361
  20,267
  23,423
  26,822
  30,460
  34,330
  38,427
  42,747
  47,286
  52,040
  57,010
  62,195
  67,597
  73,219
  79,066
  85,143
  91,459
  98,023
  104,844
  111,934
  119,306
  126,975
  134,956
  143,264
  151,919
  160,938
  170,341
Working capital, $m
  -604
  -732
  -875
  -1,032
  -1,205
  -1,393
  -1,595
  -1,812
  -2,042
  -2,285
  -2,542
  -2,812
  -3,095
  -3,391
  -3,699
  -4,020
  -4,355
  -4,702
  -5,064
  -5,439
  -5,830
  -6,235
  -6,657
  -7,095
  -7,552
  -8,026
  -8,520
  -9,035
  -9,571
  -10,131
Total debt, $m
  4,100
  5,456
  6,973
  8,651
  10,489
  12,484
  14,633
  16,933
  19,380
  21,970
  24,701
  27,571
  30,577
  33,719
  36,997
  40,412
  43,966
  47,663
  51,505
  55,498
  59,648
  63,960
  68,443
  73,104
  77,952
  82,998
  88,251
  93,722
  99,424
  105,369
Total liabilities, $m
  6,424
  7,781
  9,298
  10,976
  12,814
  14,809
  16,958
  19,258
  21,704
  24,295
  27,026
  29,895
  32,901
  36,043
  39,321
  42,737
  46,291
  49,987
  53,830
  57,823
  61,972
  66,285
  70,767
  75,428
  80,277
  85,322
  90,575
  96,047
  101,749
  107,694
Total equity, $m
  5,517
  6,681
  7,984
  9,425
  11,003
  12,717
  14,562
  16,537
  18,638
  20,863
  23,208
  25,672
  28,253
  30,952
  33,767
  36,699
  39,752
  42,926
  46,225
  49,654
  53,218
  56,921
  60,770
  64,773
  68,937
  73,269
  77,780
  82,479
  87,375
  92,481
Total liabilities and equity, $m
  11,941
  14,462
  17,282
  20,401
  23,817
  27,526
  31,520
  35,795
  40,342
  45,158
  50,234
  55,567
  61,154
  66,995
  73,088
  79,436
  86,043
  92,913
  100,055
  107,477
  115,190
  123,206
  131,537
  140,201
  149,214
  158,591
  168,355
  178,526
  189,124
  200,175
Debt-to-equity ratio
  0.740
  0.820
  0.870
  0.920
  0.950
  0.980
  1.000
  1.020
  1.040
  1.050
  1.060
  1.070
  1.080
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
Adjusted equity ratio
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -795
  -999
  -1,229
  -1,483
  -1,764
  -2,069
  -2,398
  -2,752
  -3,128
  -3,528
  -3,950
  -4,395
  -4,860
  -5,348
  -5,856
  -6,387
  -6,939
  -7,513
  -8,110
  -8,731
  -9,376
  -10,046
  -10,743
  -11,467
  -12,221
  -13,004
  -13,820
  -14,670
  -15,555
  -16,478
Depreciation, amort., depletion, $m
  1,016
  1,231
  1,471
  1,736
  2,027
  2,342
  2,682
  3,046
  3,433
  3,843
  4,275
  4,729
  5,204
  5,701
  6,220
  6,760
  7,322
  7,907
  8,514
  9,146
  9,802
  10,484
  11,193
  11,931
  12,698
  13,496
  14,326
  15,192
  16,094
  17,034
Funds from operations, $m
  221
  231
  242
  253
  263
  274
  284
  294
  305
  314
  324
  334
  344
  353
  363
  373
  383
  393
  404
  415
  426
  438
  450
  463
  477
  491
  506
  522
  538
  556
Change in working capital, $m
  -113
  -128
  -143
  -158
  -173
  -188
  -202
  -216
  -230
  -244
  -257
  -270
  -283
  -296
  -308
  -321
  -334
  -348
  -361
  -376
  -390
  -406
  -422
  -438
  -456
  -475
  -494
  -515
  -536
  -559
Cash from operations, $m
  333
  359
  385
  410
  436
  461
  486
  511
  535
  558
  581
  604
  626
  649
  671
  694
  717
  741
  765
  790
  817
  844
  872
  902
  933
  966
  1,000
  1,037
  1,075
  1,115
Maintenance CAPEX, $m
  -827
  -1,016
  -1,231
  -1,471
  -1,736
  -2,027
  -2,342
  -2,682
  -3,046
  -3,433
  -3,843
  -4,275
  -4,729
  -5,204
  -5,701
  -6,220
  -6,760
  -7,322
  -7,907
  -8,514
  -9,146
  -9,802
  -10,484
  -11,193
  -11,931
  -12,698
  -13,496
  -14,326
  -15,192
  -16,094
New CAPEX, $m
  -1,893
  -2,145
  -2,400
  -2,654
  -2,907
  -3,156
  -3,399
  -3,638
  -3,870
  -4,097
  -4,320
  -4,539
  -4,755
  -4,970
  -5,185
  -5,402
  -5,622
  -5,847
  -6,078
  -6,316
  -6,563
  -6,821
  -7,090
  -7,372
  -7,669
  -7,980
  -8,309
  -8,654
  -9,019
  -9,404
Cash from investing activities, $m
  -2,720
  -3,161
  -3,631
  -4,125
  -4,643
  -5,183
  -5,741
  -6,320
  -6,916
  -7,530
  -8,163
  -8,814
  -9,484
  -10,174
  -10,886
  -11,622
  -12,382
  -13,169
  -13,985
  -14,830
  -15,709
  -16,623
  -17,574
  -18,565
  -19,600
  -20,678
  -21,805
  -22,980
  -24,211
  -25,498
Free cash flow, $m
  -2,387
  -2,802
  -3,246
  -3,715
  -4,207
  -4,721
  -5,255
  -5,809
  -6,381
  -6,972
  -7,581
  -8,209
  -8,857
  -9,525
  -10,215
  -10,927
  -11,664
  -12,428
  -13,219
  -14,040
  -14,893
  -15,780
  -16,703
  -17,664
  -18,666
  -19,712
  -20,804
  -21,944
  -23,136
  -24,382
Issuance/(repayment) of debt, $m
  1,193
  1,356
  1,517
  1,678
  1,838
  1,995
  2,149
  2,300
  2,447
  2,590
  2,731
  2,869
  3,006
  3,142
  3,278
  3,415
  3,554
  3,696
  3,842
  3,993
  4,149
  4,312
  4,483
  4,661
  4,848
  5,045
  5,253
  5,472
  5,702
  5,945
Issuance/(repurchase) of shares, $m
  1,813
  2,164
  2,532
  2,925
  3,342
  3,782
  4,244
  4,726
  5,230
  5,753
  6,296
  6,859
  7,442
  8,046
  8,671
  9,320
  9,991
  10,688
  11,410
  12,160
  12,939
  13,750
  14,592
  15,470
  16,384
  17,337
  18,331
  19,369
  20,452
  21,584
Cash from financing (excl. dividends), $m  
  3,006
  3,520
  4,049
  4,603
  5,180
  5,777
  6,393
  7,026
  7,677
  8,343
  9,027
  9,728
  10,448
  11,188
  11,949
  12,735
  13,545
  14,384
  15,252
  16,153
  17,088
  18,062
  19,075
  20,131
  21,232
  22,382
  23,584
  24,841
  26,154
  27,529
Total cash flow (excl. dividends), $m
  619
  718
  803
  888
  973
  1,056
  1,137
  1,217
  1,295
  1,371
  1,445
  1,519
  1,591
  1,663
  1,735
  1,808
  1,881
  1,956
  2,034
  2,113
  2,196
  2,282
  2,372
  2,467
  2,566
  2,670
  2,780
  2,896
  3,018
  3,147
Retained Cash Flow (-), $m
  -1,813
  -2,164
  -2,532
  -2,925
  -3,342
  -3,782
  -4,244
  -4,726
  -5,230
  -5,753
  -6,296
  -6,859
  -7,442
  -8,046
  -8,671
  -9,320
  -9,991
  -10,688
  -11,410
  -12,160
  -12,939
  -13,750
  -14,592
  -15,470
  -16,384
  -17,337
  -18,331
  -19,369
  -20,452
  -21,584
Prev. year cash balance distribution, $m
  121
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,073
  -1,446
  -1,729
  -2,036
  -2,369
  -2,726
  -3,106
  -3,509
  -3,935
  -4,382
  -4,850
  -5,340
  -5,851
  -6,383
  -6,936
  -7,512
  -8,110
  -8,731
  -9,376
  -10,047
  -10,743
  -11,467
  -12,220
  -13,003
  -13,818
  -14,667
  -15,551
  -16,473
  -17,434
  -18,437
Discount rate, %
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
  -1,028
  -1,321
  -1,500
  -1,669
  -1,826
  -1,964
  -2,080
  -2,170
  -2,232
  -2,264
  -2,265
  -2,236
  -2,177
  -2,091
  -1,982
  -1,852
  -1,706
  -1,549
  -1,385
  -1,220
  -1,057
  -901
  -755
  -621
  -501
  -396
  -307
  -233
  -173
  -125
Current shareholders' claim on cash, %
  74.7
  56.1
  42.5
  32.5
  25.0
  19.4
  15.2
  11.9
  9.4
  7.5
  5.9
  4.8
  3.8
  3.1
  2.5
  2.0
  1.6
  1.3
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company's exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy's principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

FINANCIAL RATIOS  of  Murphy Oil (MUR)

Valuation Ratios
P/E Ratio -19.8
Price to Sales 2.9
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 9.1
Price to Free Cash Flow -16.7
Growth Rates
Sales Growth Rate -30.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.6%
Cap. Spend. - 3 Yr. Gr. Rate -23.7%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 49.3%
Total Debt to Equity 60.9%
Interest Coverage -3
Management Effectiveness
Return On Assets -1.9%
Ret/ On Assets - 3 Yr. Avg. -3.9%
Return On Total Capital -3.4%
Ret/ On T. Cap. - 3 Yr. Avg. -6.1%
Return On Equity -5.4%
Return On Equity - 3 Yr. Avg. -9.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 70.7%
Gross Margin - 3 Yr. Avg. 73.3%
EBITDA Margin 36.1%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin -16.2%
Oper. Margin - 3 Yr. Avg. -39.6%
Pre-Tax Margin -25.8%
Pre-Tax Margin - 3 Yr. Avg. -40.5%
Net Profit Margin -14.5%
Net Profit Margin - 3 Yr. Avg. -26.7%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 31.3%
Payout Ratio -75%

MUR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MUR stock intrinsic value calculation we used $2225 million for the last fiscal year's total revenue generated by Murphy Oil. The default revenue input number comes from 2017 income statement of Murphy Oil. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MUR stock valuation model: a) initial revenue growth rate of 22.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.4%, whose default value for MUR is calculated based on our internal credit rating of Murphy Oil, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Murphy Oil.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MUR stock the variable cost ratio is equal to 122.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MUR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.2% for Murphy Oil.

Corporate tax rate of 27% is the nominal tax rate for Murphy Oil. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MUR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MUR are equal to 371.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Murphy Oil operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MUR is equal to -22.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4620 million for Murphy Oil - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 173 million for Murphy Oil is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Murphy Oil at the current share price and the inputted number of shares is $5.5 billion.

RELATED COMPANIES Price Int.Val. Rating
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XOM Exxon Mobil 82.49 100.36  buy
MRO Marathon Oil 20.04 3.41  str.sell
MPC Marathon Petro 71.42 347.97  str.buy
HES Hess Corp. 63.88 8.51  str.sell

COMPANY NEWS

▶ Drilling Permit Roundup: Murphy Oil lays out Eagle Ford plans   [10:26AM  American City Business Journals]
▶ Oil and gas industry-funded group expanding to Rio Grande Valley   [May-31-18 07:48AM  American City Business Journals]
▶ Murphy Oil: 1Q Earnings Snapshot   [May-02-18 05:35PM  Associated Press]
▶ Murphy Oil Corporation Announces Dividend   [Apr-04-18 09:38AM  Business Wire]
▶ Murphy Oil Corporation Announces CFO Intention to Retire   [Feb-12-18 04:57PM  Business Wire]
▶ Murphy Oil Corporation Announces Dividend   [Feb-07-18 11:08AM  Business Wire]
▶ Murphy Oil reports 4Q loss   [Jan-31-18 06:11PM  Associated Press]
▶ How Oil Is Directing Oil-Weighted Stocks   [11:29AM  Market Realist]
▶ Which Oil-Weighted Stocks Are Outdoing Oils Gains?   [Jan-11-18 12:01PM  Market Realist]
▶ Which Oil-Weighted Stocks Could Be a Better Bet Than Oil?   [Dec-28-17 09:25AM  Market Realist]
▶ Analyzing Wall Street Targets for COP, MRO, MUR, DVN and EQT   [Dec-22-17 10:32AM  Market Realist]
▶ How Murphy Oils Free Cash Flow Is Trending   [07:33AM  Market Realist]
▶ Stocks With Rising Relative Strength: Murphy Oil   [03:00AM  Investor's Business Daily]
▶ How Increased Debt Affected Occidental Petroleums Leverage   [Dec-14-17 12:48PM  Market Realist]
▶ ETFs with exposure to Murphy Oil Corp. : December 5, 2017   [Dec-05-17 01:09PM  Capital Cube]
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