Murphy USA Succeeds With 'Asset-Heavy' Strategy

EL DORADO, Ark. –- Murphy USA Inc. is successful thanks to its heavy ownership of assets, according to The Motley Fool. The financial services website reported that Murphy USA owns 90 percent of its stores and seven product distribution terminals, “which allows it to keep both its operating expenses and fuel costs low.”

The news source likened Murphy USA in the convenience store space to CST Brands Inc., parent of Corner Store locations. CST Brands owns 79 percent of the convenience stores it runs and “therefore benefits from reduced rental cost volatility and lower exposure to lease expiry risks.”

However, Murphy USA has one other advantage CST Brands does not, the news outlet noted. Murphy USA’s relationship with Wal-Mart Stores Inc. provides another huge asset.

“As of the end of 2013, Murphy USA had 1,087 stores located close to Walmart Supercenters and 31 stores situated at Walmart Neighborhood Markets among its 1,200-odd locations,” The Motley Fool reported. “It inked an agreement with Walmart in December 2012, which gave it the right to build 200 new stores at Walmart locations over the next few years.”

Murphy USA believes there are about 1,204 Walmart Supercenters that it has not covered yet in its core markets, “which suggests a long growth runway ahead,” the website added.

El Dorado-based Murphy USA also teamed up with Walmart for a fuel discount program, another big boon to profits, the news source continued.

The Motley Fool concluded that Murphy USA’s future is promising. “Murphy USA's high level of asset ownership and synergistic relationship with Walmart are the two key reasons why it can maintain high profitability in a competitive market,” the report said. 

Murphy USA Inc. was spun off from Murphy Oil Corp. in September.