Crossamerica Partners LP (CAPL)CAPL

Crossamerica Partners LP: Comprehensive Stock Analysis

Company Profile:

History and Background:

Crossamerica Partners LP (CAPL) is a master limited partnership (MLP) formed in 2014. It is primarily engaged in the retail sale of motor fuels and related petroleum products. CAPL has a long history, dating back to the 1960s when it was founded as a terminal operator and jobber of refined petroleum products in New York City. Today, it operates in multiple states, primarily in the Northeast and Mid-Atlantic regions.

Core Business Areas:

• Retail Sale of Motor Fuels: CAPL operates a network of gas stations under brands like Gulf, Mobil, and Hess.
• Commercial Fuel Sales: CAPL supplies fuel to commercial customers like trucking companies, airlines, and government agencies.
• Convenience Store Operations: Many of CAPL's gas stations also include convenience stores offering food and beverages, snacks, and other items.
• Terminal Operations: CAPL owns and operates several petroleum product terminals, which store and distribute fuel to its retail and commercial customers.

Leadership and Corporate Structure:

• Chairman and CEO: David DeHaan
• COO: John Reece
• CFO: Michael O'Brien
• Crossamerica Partners LP is structured as a board-managed master limited partnership. The board of directors oversees the company's overall strategic direction and governance.

Top Products and Market Share:

Top Products:

• Gasoline
• Diesel fuel
• Kerosene
• Aviation fuel
• Heating oil
• Lubricants
• Convenience store products

Market Share:

CAPL's market share in the U.S. retail fuel market is estimated to be less than 1%. Its market share varies significantly across its geographic footprint, with a stronger presence in certain regional markets.

Product Performance and Market Reception:

CAPL's products are generally considered to be competitive in terms of quality and price. However, the company faces intense competition from larger national and regional fuel retailers.

Total Addressable Market (TAM):

The total addressable market for CAPL's products is the U.S. retail fuel market, which is estimated to be worth approximately $500 billion annually. The market is highly fragmented, with a few large players and numerous smaller independent retailers.

Financial Performance:

Revenue: CAPL's revenue has been relatively stable over the past few years, averaging around $2 billion annually. Net Income: Net income has fluctuated more significantly, ranging from a loss of $18 million in 2020 to a profit of $43 million in 2022. Profit Margins: Profit margins are generally thin due to the competitive nature of the industry. Earnings per Share (EPS): CAPL's EPS has followed a similar pattern to net income, fluctuating between negative and positive numbers in recent years.

Year-over-Year Comparison:

The company's year-over-year financial performance has been mixed. Revenue in 2022 was slightly lower than in 2021, while net income was significantly higher.

Cash Flow and Balance Sheet:

CAPL's cash flow from operations has been generally positive in recent years, although it has fluctuated. The company has a moderate level of debt, and its balance sheet appears to be healthy.

Dividends and Shareholder Returns:

Dividend History: CAPL has paid a quarterly dividend since its inception. The current dividend yield is approximately 6.5%. The payout ratio has been relatively consistent,ranging between 70% and 80% in recent years. Shareholder Returns: Total shareholder returns over the past year have been positive, but over longer timeframes, returns have been negative.

Growth Trajectory:

Historical Growth: CAPL has experienced modest historical growth, with revenue increasing at an average rate of 2% per year over the past five years. Future Growth Projections: The company expects to continue growing its revenue and earnings in the future, primarily through organic growth initiatives and acquisitions. Recent Growth Initiatives: CAPL has been expanding its network of gas stations and convenience stores, as well as investing in its digital marketing and loyalty programs.

Market Dynamics:

Industry Overview:

• The U.S. retail fuel industry is highly competitive and fragmented.
• The industry is currently facing challenges such as rising fuel prices and supply chain disruptions.
• Technological advancements such as electric vehicles and autonomous driving are expected to reshape the industry in the long term.

Crossamerica's Positioning:

CAPL is a relatively small player in the U.S. retail fuel industry. Its primary competitive advantage is its strong regional presence in certain markets. The company is also benefiting from favorable industry trends such as rising demand for convenience store products and loyalty programs.

Competitors:

• Major oil and gas companies (Exxon Mobil (XOM), Chevron (CVX), BP (BP))
• National and regional fuel retailers (Marathon Petroleum (MPC), Speedway (M), RaceTrac)
• Convenience store chains (7-Eleven, Circle K, Wawa)
• Electric vehicle charging companies (Tesla (TSLA), ChargePoint (CHPT))

Key Challenges and Opportunities:

Challenges:

• Increasing competition from larger players
• Rising fuel prices
• Supply chain disruptions

Opportunities:

• Expansion into new markets
• Growth of convenience store business
• Investment in digital marketing and loyalty programs

Recent Acquisitions:

• In 2023, CAPL acquired a network of gas stations in the Northeast for $100 million. This acquisition is expected to help CAPL expand its presence in the region.
• In 2022, CAPL acquired a convenience store chain in the Mid-Atlantic for $50 million. This acquisition will strengthen CAPL's convenience store business and provide additional revenue streams.

AI-Based Fundamental Rating:

Based on an AI-based analysis of CAPL's fundamentals, the company receives a rating of 6 out of 10. This rating takes into account the company's financial health, market position, and future prospects. CAPL's strengths include its solid cash flow, healthy balance sheet, and potential for growth through acquisitions. However, the company also faces challenges such as intense competition and industry headwinds.

Sources and Disclaimers:

• CAPL's annual reports and SEC filings
• Industry data from the U.S. Energy Information Administration (EIA) and the National Association of Convenience Stores (NACS)
• Financial data from Bloomberg and Yahoo Finance

This analysis is for informational purposes only and should not be considered investment advice.