Marathon (MPC) To Test Shipper Interest On Reversed Capline

Leading independent refiner Marathon Petroleum Corporation (NYSE:MPC) announced the commencement of the non-binding open season for the Capline Pipeline.

It is to be noted that Marathon Pipe Line LLC is the operator of the pipeline, having capacity to carry crude at a rate of 1.2 million barrel a day. Notably, Marathon Pipe Line LLC is an affiliate of MPLX LP (NYSE:MPLX) – a master limited partnership.

The open season will gauge the interest of shippers in the reversal of the pipeline. Presently, the Capline Pipeline carries oil to Patoka, IL, from St. James, LA.

Recently, oil transportation through the pipeline has reduced considerably as shippers are shifting to other leading U.S. pipelines. It is to be noted that a few years back, Capline was the largest pipeline in the United Sates.

In the Capline Pipeline, Marathon Petroleum has 33% stake. Plains All American Pipeline (NYSE:PAA) and BP Plc (NYSE:BP) have 54% and 13% interest, respectively.

Findlay, OH-based Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products.

Investors should know that Marathon Petroleum is the third largest domestic refiner with a combined crude oil processing capacity of approximately 1.8 million barrels per day through a portfolio of seven refineries. A major advantage for the company is its proprietary access to pipelines, which inhibits lower-cost competitors from supplying to its key markets.

However, we are concerned about the company’s rising long-term debt since 2017. Also, Marathon Petroleum’s debt-to-capitalization ratio of 39.2% is significantly higher than 28.5% of the industry.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>