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Murphy USA (MUSA) Seals a 5-Year Supply Deal With Core-Mark

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Murphy USA Inc. (MUSA - Free Report) recently inked a five-year supply deal with Westlake, TX-based Core-Mark Holding Company, Inc. , one of the largest marketers of food plus fresh and broad-line supply solutions to the convenience retail industry in North America. Per the deal, Core-Mark will deliver nearly 75% of the merchandise offered in Murphy USA’s convenience stores.

Andrew Clyde, president and CEO, Murphy USA believes that the supply deal with Core-Mark team will help both companies attain their mutual objectives of profitable growth, cost-effective operations and a well-organized execution of activities for their stores and customers.

Further, Scott E. McPherson, president and CEO, of Core-Mark says, "We are committed to helping Murphy USA drive growth in sales and margins under this new agreement, strategically aligned to enable both Murphy USA and Core-Mark to benefit from their strategic focus on expanding their food and fresh offering”.

Also, recently Murphy USA completed the acquisition of QuickChek Corporation. In December 2020, the former reached an agreement to acquire the latter in an all-cash deal value of $645 million. The purchase amount comprised estimated tax benefits worth $20 million for a net after-tax purchase price of $625 million.

With 157 stores located across Central and Northern New Jersey and the New York metro locale, QuickChek is a family-owned chain that offers best-in-class food and beverage model with a strong regional brand and mostly caters to higher customer traffic. It provides fast-service restaurant style food besides convenience items. This investment is estimated to boost Murphy USA’s earnings in 2022.

Company Summary

Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. This El Dorado, AR-based company was founded by the 2013 spin-off of Murphy Oil Corporation’s downstream business into a separate, independent and publicly-traded entity.

The company markets refined products through a chain of retail stations almost all of which are located near a Walmart supercentre, primarily in the Southeast, Southwest and Midwest United States. Murphy USA is scheduled to release fourth-quarter 2020 results on Wednesday Feb 3, before the opening bell.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is $2.17 per share and for revenues is $2.96 billion.

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Murphy USA currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are DCP Midstream Partners, LP and Matador Resources Company (MTDR - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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