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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
Murphy Oil's Owner Earnings per Share (TTM) ended in Dec. 2023 was $2.99. It's Price-to-Owner-Earnings ratio for today is 15.53.
The historical rank and industry rank for Murphy Oil's Owner Earnings per Share (TTM) or its related term are showing as below:
During the past 13 years, the highest Price-to-Owner-Earnings ratio of Murphy Oil was 49.46. The lowest was 1.15. And the median was 13.24.
Murphy Oil's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $0.75. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $4.22. It's PE Ratio ratio for today is 11.00.
Murphy Oil's EPS without NRI for the three months ended in Dec. 2023 was $0.90. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $4.61. It's PE Ratio without NRI ratio for today is 10.07.
The historical data trend for Murphy Oil's Owner Earnings per Share (TTM) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Murphy Oil Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial |
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4.79 | -10.99 | -2.15 | 4.60 | 2.99 |
Murphy Oil Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial |
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4.60 | 7.10 | 5.67 | 2.37 | 2.99 |
For the Oil & Gas E&P subindustry, Murphy Oil's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Oil & Gas industry and Energy sector, Murphy Oil's Price-to-Owner-Earnings distribution charts can be found below:
* The bar in red indicates where Murphy Oil's Price-to-Owner-Earnings falls into.
In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
To make it simple, then you will have:
Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)
Murphy Oil's Owner Earnings per Share (TTM) Calculation:
TTM / Last Quarter | Average of Last 20 Quarters | |
Net Income | 662 | |
Depreciation, Depletion and Amortization | 862 | |
Change In Deferred Tax | 180 | |
5Y Average of Maintenance Capital Expenditure | 1,140 | |
Change In Working Capital | -99 | |
Shares Outstanding (Diluted Average) | 155 |
1. Start with "Net Income" from income statement. Murphy Oil's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $662 Mil.
2. "Depreciation, Depletion and Amortization" is from cashflow statement. Murphy Oil's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $862 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.
3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income.
Murphy Oil's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $180 Mil.
4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $1,140 Mil
It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.
The following shows how to get maintenance capital expenditure.
First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.
Murphy Oil's 5-Year Average Maintenance Capital Expenditure = $1,140 Mil
5. "Change In Working Capital" is from cashflow statement. Murphy Oil's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $-99 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.
6. Murphy Oil's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 155.181 Mil.
Murphy Oil's Onwer Earnings Per Share for Dec. 2023 is calculated as:
Owner Earnings per Share (TTM) | |||||
= | ( Net Income | + | Depreciation, Depletion and Amortization | + | Change In Deferred Tax |
= | ( 661.558 | + | 861.602 | + | 179.823 |
- | 5Y Avg of Maintenance CAPEX | + | Change In Working Capital ) | / | Shares Outstanding (Diluted Average) |
- | 1140.2466755608 | + | -99.361) | / | 155.181 |
= | 2.99 |
Price-to-Owner-Earnings | = | Current Price | / | Owner Earnings per Share (TTM) |
= | 46.44 | / | 2.99 | |
= | 15.53 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.
Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.
Thank you for viewing the detailed overview of Murphy Oil's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.
Elisabeth W Keller | director | 300 PEACH ST., EL DORADO AR 71730 |
Robert Madison Murphy | director | 200 NORTH JEFFERSON SUITE 400, EL DODRADO AR 71730 |
John B Gardner | officer: Treasurer | 200 PEACH ST, EL DORADO AR 71730 |
Thomas J Mireles | officer: Vice President | 200 PEACH STREET, P O BOX 7000, EL DORADO AR 71730 |
Paul D. Vaughan | officer: Vice President & Controller | 9805 KATY FREEWAY G-200, HOUSTON TX 77024 |
Meenambigai Palanivelu | officer: Vice President | 9805 KATY FREEWAY G-200, HOUSTON TX 77024 |
Daniel R Hanchera | officer: Senior Vice President | 9805 KATY FREEWAY G-200, HOUSTON TX 77024 |
Eric M Hambly | officer: Executive Vice President | 300 PEACH STREET, EL DORADO AR 71730 |
Roger W. Jenkins | officer: Executive Vice President | 200 PEACH STREET, P.O. BOX 7000, EL DORADO AR 71730 |
Kelly L Whitley | officer: Vice President | 200 PEACH ST., EL DORADO AR 71730 |
Louis W Utsch | officer: Vice President | 300 PEACH STREET, P.O. BOX 7000, EL DORADO AR 71730 |
Maria A Martinez | officer: Vice President | 300 PEACH STREET, EL DORADO AR 71730 |
T Jay Collins | director | C/O OCEANEERING INTERNATIONAL INC, 11911 FM 529, HOUSTON TX 77041-3011 |
Leyster L. Jumawan | officer: Vice President & Treasurer | 9805 KATY FREEWAY G-200, HOUSTON TX 77024 |
E Ted Botner | officer: Secretary | 200 PEACH ST, EL DORADO AR 71730 |
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