Five C-Store Chains Make Forbes Best Big Companies List

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Five C-Store Chains Make Forbes Best Big Companies List

Five convenience industry chains can celebrate a little more this holiday season, as they were named some of the best big companies by Forbes. Finding homes on the list of the best 400 publicly traded companies are: Casey's General Store, The Pantry, Marathon Oil, Sunoco and Valero.

The winners were selected based on reviews of financial metrics, Wall Street forecasts, corporate governance ratings and other public information, reported Forbes. The top 400 companies show financial data that would make most companies envious. Median 12-month performance saw 16 percent sales growth, 28 percent earnings per share growth and an 18 percent return on Wall Street, Forbes reported. However, turnover on the list is high: in 2007, 177 previous companies were replaced.

Representing the convenience industry on the list are:
-- Casey's General Store, which returns to the list for the eighth time, with $3.8 billion in sales and $56 million in net income for 2006.

-- Newcomer The Pantry, with $5.1 billion in sales and $89 million in net income for its fiscal 2006.

-- Sixth time veteran Marathon Oil. It saw net sales of $53.8 billion and $5.4 billion in net income for fiscal 2006.

-- Sunoco, making the list for the eighth time, saw net sales of $36.2 billion and $1.1 billion in net income, and

-- Valero, which appears on the list for the sixth time, with $97.9 billion in net sales and $5.7 billion in net income in fiscal 2006.

Out of the list of 400, a 'best managed' company in each of the 26 industries was chosen on the basis of financial performance, leadership, innovation and execution. In the Food Market category, The Pantry was picked -- the only c-store chain to be named a 'best managed' company.

It achieved this through a high net income of $89 million, and a swift acquisition pace. Even though 70 percent of the company's sales come from gasoline, the profits lie within -- in-store merchandise grossed $518 million in profits, while gas profits only reached $281 million.

To boost up its 37 percent margin on merchandise, the company added private label water and moved its high-margin coffees to the front of the store to attract attention, along with additions of Subway and Quiznos and the rebranding of all its stores to Kangaroo Express, the report stated.

While it does all this, the chain maintains an insatiable appetite for acquisitions. In fiscal 2007 alone, the company has acquired or signed agreements to acquire 65 stores to date.

Most recently, it closed on an eight-store acquisition in Mississippi and Florida. The deal included seven Rascal's stores in northern Mississippi that generated revenue of approximately $20 million in the latest fiscal year. In addition, the company completed the purchase of a single Go Time store in Naples, Fla., which generated revenue of approximately $10 million in 2005. That store is the company's first in the south Florida market.

Both transactions are expected to be immediately accretive to the company's earnings per share, and were financed with a combination of cash on hand and lease financing. Terms were not disclosed.

New builds are also helping the company stay dominant in the Southeastern U.S., but it comes at some risk -- while the company owes $843 million in leases and long-term debt, its shareholders only hold $337 million, according to Forbes.