Here's How Much Investing $1,000 In Marathon Oil Stock Back In 2010 Would Be Worth Today

Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500's SPY total return for the decade was 250.5%. But there’s no question some big-name stocks did much better than others along the way.

Marathon’s Difficult Decade: One underperformer of the last decade was U.S. oil exploration & production company Marathon Oil Corporation MRO.

Marathon’s past 10 years were dominated by a major restructuring, a surge in U.S. shale oil production and an unprecedented collapse in oil prices due to COVID-19.

Marathon shares started the 2010s trading at around $19.25 but hit their decade-high above $37.99 in mid-2014 just prior to the first collapse in oil prices. That first downturn was driven by a supply glut credited in large part to a booming U.S. shale oil industry.

In 2011, during the shale oil boom, Marathon restructured its company, spinning off its refining business into its own entity. The E&P business continued trading as Marathon under the ticker "MRO," and the refining company began trading as Marathon Petroleum Corp MPC.

The spinoff was structured so that Marathon Oil shareholders received one share of MPC stock for every two shares of MRO they held.

2020 And Beyond: Marathon Oil shares have drifted steadily lower over the past six years since the oil market peaked in 2014. Marathon shares are down 71.7% overall in the past five years, dipping to all-time lows of $3.02 earlier this year when oil prices plunged briefly into negative territory. Yet Marathon Petroleum has held up relatively well, preserving value for investors.

At Marathon’s $19.25 opening price for the decade, an investor would have been able to buy about 52 shares of Marathon stock for $1,000. Those shares would have entitled investors to 26 shares of MPC stock following the spin-off.

Therefore, $1,000 worth of Marathon Oil stock in 2010 would now be worth about $492, assuming reinvested dividends.

The 26 shares of MPC initially worth about $546 have generated a total return of about 142.3% since the spin-off and would now be worth about $1,322. So overall, $1,000 worth of Marathon Oil stock in 2010 would be worth around $1,814 today, assuming reinvested dividends.

Looking ahead, analysts expect even more difficulties for Marathon in 2020. The average price target among the 26 analysts covering the stock is $6, suggesting 22.5% downside. 

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