Magnolia Oil & Gas Corporation

MGY

Oil & Gas Exploration & Production · Energy

Price

$27.26

+0.37 (+1.38%)

Market Cap

$5.04B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+5.8% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 175.4M (2021) → 185.6M (2025)

Magnolia Oil & Gas is a company that pulls oil and natural gas out of the ground in South Texas. It operates mainly in the Eagle Ford Shale and Austin Chalk formations, selling crude oil, natural gas, and natural gas liquids to energy traders, refiners, and other buyers. It is a mid-sized independent producer, meaning it focuses only on finding and producing energy rather than refining or selling fuel at the pump.

Magnolia earns money by selling the oil and gas it produces, so its revenue rises and falls with commodity prices. The company operates entirely in the United States, with a market cap around $5.2 billion, and it stands out for running with low costs and a disciplined approach to spending — it targets keeping capital spending well below its cash flow. The biggest risk the company faces is a sustained drop in oil and gas prices, which would directly shrink its revenue and profits regardless of how efficiently it operates.

Winston Score History

Politician Trades

4 trades / 12mo

2 Congressional buys and 2 sells on MGY in the last 12 months.

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Score breakdown

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Quality

Gross Margin

42.9%

Healthy — 42.9% gross margin

Operating Margin

29.6%

Excellent — 29.6% operating margin

ROCE

4.0%

Weak — 4.0% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

-0.3%

Shrinking sales (-0.3% YoY)

EPS YoY

-9.8%

Earnings shrinking (-9.8% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

270%

Turns 270% of profit into real cash

FCF Margin

30.0%

Converts sales into free cash efficiently (30.0%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.21

Conservative — low debt load (0.21)

Interest Cover

20.32x

Comfortably covers interest (20.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

15.7x

Fair value — P/E 15.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+6.0

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (15.7 → 9.7)

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Dividends

Dividend Yield

2.44%

Moderate income — 2.44% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+12.5%

Dividend growing fast (12.5% YoY)

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