Assignment
Instruction
You are a financial analyst for a large investment advisory firm. You have been asked to research three companies in the Oil and Gas Industry. The three companies are Marathon Petroleum Corporation (MPC), Phillips 66 (PSX) and Valero Energy Corporation (VCO). These companies refine petroleum and sell gasoline. And they also operate in other petroleum-related markets. The end product of your research is a recommendation (and related justification) about which company's (1) bonds and (2) common stock your firm should recommend to clients.
Be sure to include in your analysis any debt-related ratiosand equity-related ratios which you deem critical. And be sure to look at trends. You may also refer to information published on various reputable internet sites. And you might also look for various pieces of information found on the companies' websites, such as press releases and SEC filings.
You should be able to find a lot of information to help with your analysis. Please be sure to do your own work. Your report might include your recommendations and related analyses in one section, with supporting documentation in a second section.
Remember that you have to analyze three companies, the stock AND debt of which you will recommend or not recommend. You need to incorporate:
- by analyzing the creditworthiness of the three companies, using various ratios and looking for rating agency reviews and other information that would help you determine the best company when looking at each company's borrower risk and effective interest rates;
- by analyzing the opportunity for reasonably predictable stock price and dividend increases, using various equity-related ratios and trends.
The report should include recommendations and related rationale in one section, which like 6pages or more, and with support in the second section. Your support might include ratio calculations, copies of the companies income statements, balance sheets and cash flow statements, any published security analysts' reports, and other information (most likely from internet searches and SEC filings).