Critical Analysis: Murphy USA (NYSE:MUSA) & Revolve Group (NYSE:RVLV)

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

Institutional and Insider Ownership

67.6% of Revolve Group shares are owned by institutional investors. Comparatively, 80.8% of Murphy USA shares are owned by institutional investors. 42.7% of Revolve Group shares are owned by insiders. Comparatively, 9.0% of Murphy USA shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Revolve Group and Murphy USA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Revolve Group	$1.23 billion	1.19	$61.71 million	$1.01	20.27
Murphy USA	$19.38 billion	0.50	$470.60 million	$32.84	16.03

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Revolve Group	5.54%	13.38%	8.71%
Murphy USA	2.87%	96.01%	12.95%

Analyst Recommendations

This is a summary of recent ratings for Revolve Group and Murphy USA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Revolve Group	0	6	7	0	2.54
Murphy USA	0	6	5	0	2.45

Revolve Group presently has a consensus target price of $30.08, suggesting a potential upside of 46.90%. Murphy USA has a consensus target price of $606.89, suggesting a potential upside of 15.32%. Given Revolve Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Revolve Group is more favorable than Murphy USA.

Volatility and Risk

Revolve Group has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Summary

Revolve Group beats Murphy USA on 8 of the 14 factors compared between the two stocks.

About Revolve Group

Revolve Group, Inc. operates as an online fashion retailer for millennial and generation z consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands, as well as luxury brands through its websites and mobile apps. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.

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.