Critical Comparison: Tandy Leather Factory (OTCMKTS:TLFA) vs. Murphy USA (NYSE:MUSA)

Tandy Leather Factory (OTCMKTS:TLFA) and Murphy USA (NYSE:MUSA) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.

Risk & Volatility

Tandy Leather Factory has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Murphy USA has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.

Profitability

This table compares Tandy Leather Factory and Murphy USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tandy Leather Factory	0.21%	0.33%	0.23%
Murphy USA	2.87%	96.01%	12.95%

Institutional & Insider Ownership

55.2% of Tandy Leather Factory shares are owned by institutional investors. Comparatively, 80.8% of Murphy USA shares are owned by institutional investors. 47.7% of Tandy Leather Factory shares are owned by company insiders. Comparatively, 9.0% of Murphy USA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Tandy Leather Factory and Murphy USA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	0	0	0	0	0.00
Murphy USA	0	5	6	0	2.55

Murphy USA has a consensus target price of $606.89, indicating a potential upside of 6.92%. Given Murphy USA’s stronger consensus rating and higher probable upside, analysts plainly believe Murphy USA is more favorable than Tandy Leather Factory.

Earnings and Valuation

This table compares Tandy Leather Factory and Murphy USA”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandy Leather Factory	$82.70 million	0.00	$1.35 million	$0.02	N/A
Murphy USA	$21.48 billion	0.49	$470.60 million	$32.84	17.28

Murphy USA has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory is trading at a lower price-to-earnings ratio than Murphy USA, indicating that it is currently the more affordable of the two stocks.

Summary

Murphy USA beats Tandy Leather Factory on 10 of the 13 factors compared between the two stocks.

About Tandy Leather Factory

Tandy Leather Factory, Inc., together with its subsidiaries, operates as a retailer of leather and leathercraft-related items in North America and Spain. It offers leather, hand tools, hardware, kits, liquids, teaching materials, open workbenches, machinery, and related accessories and supplies. The company also manufactures leather laces, cut leather pieces, do-it-yourself kits, thread laces, belt strips and straps, and Craftaids. In addition, it offers production services, including cutting, splitting, and assembly services to business customers. The company sells its products under the Tandy Leather, Eco-Flo, Craftool, CraftoolPro, Dr. Jackson's, and TandyPro brand names through company-owned stores; and orders generated from its websites, such as tandyleather.com, tandyleather.ca, tandyleather.eu, and tandyleather.com.au. It operates 106 retail stores, including 95 stores in the United States; ten stores in Canada; and one store in Spain. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1919 and is headquartered in Fort Worth, Texas.

About Murphy USA

Murphy USA Inc. engages in marketing of retail motor fuel products and convenience merchandise. The company operates retail stores under the Murphy USA, Murphy Express, and QuickChek brands, as well as operates non-fuel convenience stores. It operates retail gasoline stores principally in the Southeast, Southwest, and Midwest United States. Murphy USA Inc. was founded in 1996 and is headquartered in El Dorado, Arkansas.