Stock of the Day

February 8, 2022

ConocoPhillips (COP)

$97.90
-$4.10 (-4.0%)
Market Cap: $129.78B

About ConocoPhillips

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

ConocoPhillips Bull Case

Here are some ways that investors could benefit from investing in ConocoPhillips:

  • Strong Earnings Performance: ConocoPhillips reported earnings per share of $1.98, exceeding analysts' expectations of $1.78, indicating robust financial health and effective management.
  • Attractive Dividend Yield: The company has declared a quarterly dividend of $0.78 per share, translating to an annualized dividend of $3.12, which offers a dividend yield of 3.24%. This can provide a steady income stream for investors.
  • Solid Market Position: With a market capitalization of $110.93 billion, ConocoPhillips is a significant player in the energy sector, which can provide stability and growth potential for investors.
  • Low Debt Levels: The company has a debt-to-equity ratio of 0.36, indicating a conservative approach to leverage, which can reduce financial risk and enhance stability during market fluctuations.
  • Current Stock Price: As of now, ConocoPhillips shares are trading at $96.39, which may present a buying opportunity for investors looking for value in the energy sector.

ConocoPhillips Bear Case

Investors should be bearish about investing in ConocoPhillips for these reasons:

  • Volatility in Energy Prices: The energy sector is subject to fluctuations in oil and gas prices, which can impact ConocoPhillips' profitability and stock performance.
  • High Beta: With a beta of 1.18, ConocoPhillips' stock is more volatile than the market, which means it may experience larger price swings, posing a risk for conservative investors.
  • Dependence on Global Markets: The company's operations span multiple countries, making it susceptible to geopolitical risks and changes in international regulations that could affect its business.
  • Moderate Growth Forecast: Analysts project an earnings per share of 8.3 for the current fiscal year, which may indicate slower growth compared to other sectors, potentially limiting upside for investors.
  • Recent Stock Performance: The stock has seen a decline from its 1-year high of $135.18, which may raise concerns about its current momentum and future performance.

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