Financial Review: Tandy Leather Factory (OTCMKTS:TLFA) vs. Murphy USA (NYSE:MUSA)

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

Profitability

This table compares Murphy USA and Tandy Leather Factory’s 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%
Tandy Leather Factory	0.21%	0.33%	0.23%

Analyst Ratings

This is a breakdown of current ratings and target prices for Murphy USA and Tandy Leather Factory, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy USA	0	5	6	0	2.55
Tandy Leather Factory	0	0	0	0	0.00

Murphy USA currently has a consensus price target of $606.89, suggesting a potential upside of 6.92%. Given Murphy USA’s stronger consensus rating and higher probable upside, research analysts clearly believe Murphy USA is more favorable than Tandy Leather Factory.

Institutional & Insider Ownership

80.8% of Murphy USA shares are held by institutional investors. Comparatively, 55.2% of Tandy Leather Factory shares are held by institutional investors. 9.0% of Murphy USA shares are held by company insiders. Comparatively, 47.7% of Tandy Leather Factory shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Murphy USA has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500. Comparatively, Tandy Leather Factory has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Valuation and Earnings

This table compares Murphy USA and Tandy Leather Factory”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy USA	$21.48 billion	0.49	$470.60 million	$32.84	17.28
Tandy Leather Factory	$82.70 million	0.00	$1.35 million	$0.02	N/A

Murphy USA has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory 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

Murphy USA beats Tandy Leather Factory on 10 of the 13 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 Tandy Leather Factory

Tandy Leather Factory, Inc., together with its subsidiaries, operates as a retailer of leather and leathercraft-related items in North America and Spain. It offers leather, hand tools, hardware, kits, liquids, teaching materials, open workbenches, machinery, and related accessories and supplies. The company also manufactures leather laces, cut leather pieces, do-it-yourself kits, thread laces, belt strips and straps, and Craftaids. In addition, it offers production services, including cutting, splitting, and assembly services to business customers. The company sells its products under the Tandy Leather, Eco-Flo, Craftool, CraftoolPro, Dr. Jackson's, and TandyPro brand names through company-owned stores; and orders generated from its websites, such as tandyleather.com, tandyleather.ca, tandyleather.eu, and tandyleather.com.au. It operates 106 retail stores, including 95 stores in the United States; ten stores in Canada; and one store in Spain. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1919 and is headquartered in Fort Worth, Texas.