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3 Gas Station Stocks to Watch
February 28, 2015 – 12:32 pm

The Wal-Mart connection
Looking at gas stations from this perspective, oil prices and gas prices can do what they want - gas stations are about convenience. And that's why you might want to take a look at Murphy Oil USA, which was spun off of Murphy Oil (MUR) in late 2013. Murphy Oil USA runs roughly 1, 200 gas stations and convenience stores across 23 states.

The interesting thing here is that Murphy Oil USA's stations tend to be located near Wal-Mart stores. That's important because shoppers frequent Wal-Mart regularly to buy everything from food to clothing. And, while there, why not fill up the tank?

How big a lift does Murphy Oil USA get? According to the company, a typical gas station at a grocery store sees around 2, 400 customers a day. Murphy Oil USA stations at a Wal-Mart Neighborhood Market (basically a grocery store) gets nearly 4, 000. And a Murphy Oil USA station at a Wal-Mart Supercenter gets around 6, 000.

At first blush you might think that being next to a Walmart would dampen convenience store sales. However, Murphy Oil USA has been building this relationship since 1996 with plans for further expansion. So something must be working. In fact, Murphy Oil USA has found that its single serve items actually compliment Walmart's focus on larger take home offerings.

Already twice as big
CST Brands, which was spun off of Valero Energy in early 2013, is another gas station play. This company owns or supplies gas and convenience store products to around 3, 000 stations in the U.S. and Canada. However, the big news here was the late 2014 purchase of the general partner of CrossAmerica Partners LP (CAPL), another gas station company. According to CST, this move doubled its footprint.

However, that's not really the big news. The big news is that CST now runs an LP, which gives it another avenue for fueling its own growth. This is possible because CST can sell, or drop down, assets to the LP to raise cash to use for future acquisitions and expansion.

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