Financial Review: Macquarie Infrastructure (MIC) & Core-Mark Holding (CORE)

Macquarie Infrastructure (NYSE: MIC) and Core-Mark Holding (NASDAQ:CORE) are both integrated logistics operators companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Profitability

This table compares Macquarie Infrastructure and Core-Mark Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Macquarie Infrastructure 9.82% 5.66% 2.28%
Core-Mark Holding 0.27% 9.95% 3.63%

Dividends

Macquarie Infrastructure pays an annual dividend of $5.52 per share and has a dividend yield of 8.0%. Core-Mark Holding pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. Macquarie Infrastructure pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Core-Mark Holding pays out 40.0% of its earnings in the form of a dividend. Macquarie Infrastructure has increased its dividend for 5 consecutive years. Macquarie Infrastructure is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Macquarie Infrastructure has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Core-Mark Holding has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

81.3% of Macquarie Infrastructure shares are owned by institutional investors. Comparatively, 99.5% of Core-Mark Holding shares are owned by institutional investors. 5.9% of Macquarie Infrastructure shares are owned by company insiders. Comparatively, 2.4% of Core-Mark Holding shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Macquarie Infrastructure and Core-Mark Holding, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Macquarie Infrastructure 0 1 3 0 2.75
Core-Mark Holding 0 1 3 0 2.75

Macquarie Infrastructure currently has a consensus target price of $89.33, indicating a potential upside of 29.90%. Core-Mark Holding has a consensus target price of $39.50, indicating a potential upside of 35.51%. Given Core-Mark Holding’s higher possible upside, analysts clearly believe Core-Mark Holding is more favorable than Macquarie Infrastructure.

Valuation and Earnings

This table compares Macquarie Infrastructure and Core-Mark Holding’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Macquarie Infrastructure $1.65 billion 3.52 $156.38 million $2.07 33.22
Core-Mark Holding $14.53 billion 0.09 $54.20 million $0.90 32.39

Macquarie Infrastructure has higher revenue, but lower earnings than Core-Mark Holding. Core-Mark Holding is trading at a lower price-to-earnings ratio than Macquarie Infrastructure, indicating that it is currently the more affordable of the two stocks.

Summary

Macquarie Infrastructure beats Core-Mark Holding on 8 of the 15 factors compared between the two stocks.

Macquarie Infrastructure Company Profile

Macquarie Infrastructure Corporation owns and operates a group of businesses that provide services, such as bulk liquid terminalling and handling services. The Company operates through four segments: International-Matex Tank Terminals (IMTT), Atlantic Aviation, Contracted Power (CP) and MIC Hawaii. Its group of businesses also provides services, such as aircraft fueling, CP generation and utility gas services. Its group of businesses provides services to businesses, government agencies and individuals in the United States. IMTT segment provides bulk liquid terminal services in the United States. As of December 31, 2016, Atlantic Aviation operated Fixed based operations (FBOs) at 69 airports in the United States. The businesses in its CP segment sell electricity to off-takers, pursuant to multi-year contracts. MIC Hawaii segment consists of Hawaii Gas and several smaller businesses. Hawaii Gas consists of a gas utility and a liquefied petroleum gas (LPG) distribution business.

Core-Mark Holding Company Profile

Core-Mark Holding Company, Inc. is a wholesale distributor to the convenience retail industry in North America. The Company provides sales, marketing, distribution and logistics services. As of December 31, 2016, the Company offered services to over 43,000 customer locations across the United States and Canada through 30 distribution centers. The Company’s segments include the United States, Canada and Corporate. The Company’s primary customer base consists of traditional convenience stores, as well as alternative outlets selling consumer packaged goods. The Company’s traditional convenience store customers include various national and super-regional convenience store operators, as well as independently owned convenience stores. Its alternative outlet customers include a range of store formats, including grocery stores, drug stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos and hardware stores.

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