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Marathon Oil Corporation (MRO)

Company Dividend Discount ModelIndustry: Oil & Gas Exploration & ProductionSector: Energy

Valuation Snapshot

Stable Growth$16.98 - $24.61$20.68
Multi-Stage$26.63 - $29.26$27.92
Blended Fair Value$24.30
Current Price$26.63
Upside-8.75%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS8.23%-6.81%0.440.380.250.110.280.290.300.280.800.95
YoY Growth--14.09%56.03%120.31%-60.49%-4.14%-0.59%4.94%-64.78%-15.29%6.89%
Dividend Yield--1.53%1.60%0.98%1.05%8.59%1.70%1.84%1.79%7.21%3.63%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,330.00
(-) Cash Dividends Paid (M)253.00
(=) Cash Retained (M)1,077.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)266.00166.2599.75
Cash Retained (M)1,077.001,077.001,077.00
(-) Cash Required (M)-266.00-166.25-99.75
(=) Excess Retained (M)811.00910.75977.25
(/) Shares Outstanding (M)572.96572.96572.96
(=) Excess Retained per Share1.421.591.71
LTM Dividend per Share0.440.440.44
(+) Excess Retained per Share1.421.591.71
(=) Adjusted Dividend1.862.032.15
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.66%-0.66%0.34%
Fair Value$16.98$20.68$24.61
Upside / Downside-36.24%-22.33%-7.59%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,330.001,321.261,312.581,303.951,295.381,286.871,325.48
Payout Ratio19.02%33.22%47.41%61.61%75.80%90.00%92.50%
Projected Dividends (M)253.00438.90622.34803.35981.961,158.181,226.07

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.66%-0.66%0.34%
Year 1 PV (M)398.25402.30406.35
Year 2 PV (M)512.40522.87533.45
Year 3 PV (M)600.17618.67637.54
Year 4 PV (M)665.66693.15721.48
Year 5 PV (M)712.40749.37787.85
PV of Terminal Value (M)12,367.2613,008.9613,677.02
Equity Value (M)15,256.1315,995.3016,763.69
Shares Outstanding (M)572.96572.96572.96
Fair Value$26.63$27.92$29.26
Upside / Downside-0.01%4.83%9.87%

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