If You Invested $1,000 In Marathon Oil Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF Trust SPY total return over the last 12 months is 33.2%. But there is no question some big-name stocks performed better than others along the way.

Marathon’s Big Run: One company that has been a great investment in the last year has been oil producer Marathon Oil Corporation MRO.

Like many other companies, the COVID-19 pandemic crushed Marathon’s business in 2020. In 2019, Marathon reported 59 cents in adjusted EPS on $5.1 billion in revenue. In 2020, EPS swung to a $1.83 loss and revenue dropped to $3.1 billion.

In fact, in WTI crude oil prices briefly dropped below $0 during the worst of the pandemic sell-off as demand plummeted and oil buyers ran out of storage space.

At the beginning of 2020, Marathon shares were trading at $13.69. By the beginning of March, the stock was down to $8.45 as news of the coronavirus spreading in China prompting concerns about a U.S. pandemic.

When the S&P 500 hit its pandemic bottom on March 23, Marathon shares traded down to $3.31. Unfortunately, while the S&P 500 bounced from there, Marathon still had not hit its crisis lows. In fact, Marathon dropped to $3.02 on April 1 as oil investors saw the writing on the wall.

On April 20, WTI crude oil futures contracts fell below $0 per barrel for the first time in history, settling at an unprecedented price of negative $37.63. The May WTO contracts expired the next day, and prices quickly recovered back into positive territory.

By early May, Marathon shares were back at above $5 and the Marathon rebound started to pick up steam. By June Marathon had made it above $8 before the rebound started running out of steam.

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Marathon In 2021, Beyond: Marathon pulled back to as low as $3.73 in October before the stock got hot once again. WTI crude oil prices rallied to post-pandemic highs above $65/bbl in March 2021, and Marathon shares topped $10 in February. Oil prices made it as high as $76.98/bbl in July, and Marathon shares topped out at $14.33 at around the same time.

Inflation has weighed on many stocks, but it is good news for stocks in the energy sector like Marathon. In the most recent quarter, Marathon reported 153% revenue growth and 102.1% net income growth compared to a year ago.

Marathon and other oil stocks are also attractive economic reopening plays given economists expect a boom in oil and gas demand in coming quarters.

Marathon shares have pulled back to around $11.28 and WTI prices have retreated to $69.22, but recent disruptions from Hurricane Ida have provided at least temporary support.

Marathon investors who bought one year ago and held on have generated an impressive return on their investment. In fact, $1,000 in Marathon stock bought on Sept. 8, 2020, would be worth about $2,334 today, assuming reinvested dividends.

Looking ahead, analysts are expecting more upside for Marathon in the next 12 months. The average price target among the 27 analysts covering the stock is $16, suggesting a 41.5% upside from current levels.