COP  Conocophillips

Exchange

NYSE

Sector

Energy

Industry

Integrated oil Companies

Market Cap.

59.21B

Vuru Grade

11.84/100

Current Price

$47.91
+0.05 (+0.10%)

Growth Price

$25.87
Overvalued by 46.00%

Company Metrics

  • P/E 24.42
  • P/S 2.48
  • P/B 1.69
  • EPS -2.91
  • Cash ROIC -0.70%
  • Cash Ratio 0.53
  • Dividend 1.06 / 2.19%
  • Avg. Vol. 7.96M
  • Shares 1.24B
  • Market Cap. 59.21B

Company Description

ConocoPhillips operates as an integrated energy company worldwide. The company's Exploration and Production (E&P) segment explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. Its Midstream segment gathers, processes, and markets natural gas; and fractionates and markets natural gas liquids in the United States and Trinidad... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

What to Expect When ConocoPhillips Reports Q1 Earnings
Bloomington Pantagraph - 8 hours ago
With oil prices above $50 a barrel for much of Q1, the earnings report will give investors a chance to see if cash flow positivity was achieved, or even if ConocoPhillips is able to report a profit. If so, then the company is looking good moving ...
Will ConocoPhillips Finally Turn a Profit This Quarter? - Madison.com
ConocoPhillips to report earnings on May 2 - Nasdaq
3 Things You Didn't Know About ConocoPhillips
Madison.com - Apr 27, 2017
Yes, ConocoPhillips is the world's largest independent oil and gas production and exploration company (what a mouthful!
Better Buy: Sunoco LP vs. ConocoPhillips - Motley Fool
ConocoPhillips Earnings Preview
Seeking Alpha - Apr 26, 2017
On May 2, the super-independent ConocoPhillips (NYSE:COP) is going to post its first quarter earnings. M&A activity will be high on the agenda, as will changes in capital expenditure, dividend, and share buyback guidance.
Cenovus Faces Investors Following ConocoPhillips Deal - Oil and Gas Investor (registration)
Cenovus Shareholder Tries to Impede Deal with ConocoPhillips - Yahoo Finance
Can ConocoPhillips (COP) Spring a Surprise in Q1 Earnings?
Yahoo Finance - Apr 27, 2017
Last quarter, ConocoPhillips posted a positive earnings surprise of 31.58%. The company beat estimates in three of the four trailing quarters with an average positive earnings surprise of 4.93%.
ConocoPhillips: Beware Of Risks
Seeking Alpha - Apr 26, 2017
ConocoPhillips is primarily being purchased for its 2.2% dividend, but the foundation of these dividends is fragile. While the foundations of the dividend are shaky, the dividend is unlikely to be cut.
Deal Of The Month: ConocoPhillips Cuts Gas Profile in $3B San Juan Sale
Rigzone - Apr 28, 2017
ConocoPhillips' sale of its San Juan Basin gas assets to a Hilcorp Energy affiliate is a smart move, say analysts who recently reduced their forecast for U.S.
Can ConocoPhillips Report Profits in 1Q17?
Market Realist - Apr 28, 2017
ConocoPhillips (COP) is set to report its 1Q17 and fiscal 2017 earnings on May 2, 2017, before the market opens. For 1Q17, excluding one-time items, Wall Street analysts expect ConocoPhillips to report EPS (earnings per share) in the range of -$0.21–$0.14.
ConocoPhillips takes slow, steady route in race for oil profits
Reuters - Apr 20, 2017
ConocoPhillips' most recent sales of Canadian oil-sands properties and U.S. natural gas wells for a combined $16 billion will part with nearly 30 percent of its proved reserves in order to deliver near-term shareholder payouts and pare debt.
ConocoPhillips gets leaner as oil prices languish
Houston Chronicle - Apr 13, 2017
For ConocoPhillips, these transactions mark another step in its transformation from one of the world's largest oil companies, with integrated oil refining and production operations, to a leaner U.S.
ConocoPhillips to sell assets to Hilcorp affiliate - Farmington Daily Times
ConocoPhillips' Asset Exodus Continues - Madison.com
ConocoPhillips: Mr. Market Is Not Impressed
Seeking Alpha - Apr 14, 2017
About two weeks ago, ConocoPhillips (NYSE:COP), the largest independent oil producer in terms of output, announced a massive asset sale, and Wall Street cheered.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for COP to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate COP's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$47.91 Current Price

$25.87 Growth Price (DCF)

Overvalued by 46.00%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


COP's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

Very Poor Cash Return on Invested Capital over the past 5 years

COP has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

COP has lost $0.70 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow -250.00M 550.00M -350.00M -2.48B -466.00M
divided by
Invested Capital 96.08B 96.41B 99.94B 85.86B 79.20B
Cash ROIC -0.26% 0.57% -0.35% -2.89% -0.59%

Poor Return on Equity over the past 5 years

COP has shown an inability to deliver strong results for shareholders. This could be due to poor management, COP operating in a highly competitive industry, or having a weak business in general.

COP has only generated $7.55 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 8.50B 9.22B 6.94B -4.37B -
divided by
Stockholders' Equity 47.99B 52.09B 51.91B 39.76B 34.97B
Return on Equity 17.71% 17.69% 13.37% -10.99% -

Mediocre Business Performance over the past 10 years

COP isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

COP has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 12.76B 3.56B 12.48B 7.28B 6.38B -250.00M 550.00M -350.00M -2.48B -466.00M

Weak Balance Sheet

COP's financial position is not ideal. The key is to check whether COP is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 1.46B 755.00M 542.00M 11.51B 6.36B 3.62B 6.52B 5.06B 2.37B 3.66B
Current Assets 24.74B 20.84B 21.17B 34.66B 30.22B 23.99B 19.02B 15.07B 8.79B 8.61B
Total Assets 177.76B 142.87B 152.59B 156.31B 153.23B 117.14B 118.06B 116.54B 97.48B 89.77B
Current Liabilities 26.88B 21.78B 23.70B 27.42B 28.07B 17.44B 15.13B 11.54B 9.26B 6.91B
Total Liabilities 88.77B 87.70B 90.12B 87.75B 88.01B 69.16B 65.97B 64.63B 57.72B 54.80B
Stockholder' Equity 88.98B 55.17B 62.47B 68.56B 65.22B 47.99B 52.09B 51.91B 39.76B 34.97B
Current Ratio 0.92 0.96 0.89 1.26 1.08 1.38 1.26 1.31 0.95 1.25
TL-to-TA 0.50 0.61 0.59 0.56 0.57 0.59 0.56 0.55 0.59 0.61

Low or No Reinvestment of Profits over the past 10 years

COP has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to COP operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 50.51B 30.64B 32.66B 40.40B 49.19B 35.34B 41.16B 44.50B 36.41B 31.55B
Retained Earnings Growth - -39.33% 6.58% 23.70% 21.78% -28.17% 16.48% 8.12% -18.18% -13.36%

Highly Competitive Industry over the past 10 years

It's likely that COP is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely COP invests heavily in R&D and Sales, General & Administrative expenses.

Only $4.09 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 11.89B -17.00B 4.86B 11.36B 12.44B 8.50B 9.22B 6.94B -4.37B -
divided by
Revenue 194.50B 246.18B 152.84B 198.66B 251.23B 62.00B 58.25B 55.52B 30.94B -
Net Profit Margin 6.11% -6.90% 3.18% 5.72% 4.95% 13.71% 15.82% 12.50% -14.13% -

Inconsistent Gross Profit Margins over the past 10 years

COP has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$37.51 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 60.38B 65.70B 40.07B 52.27B 251.23B 29.98B 28.37B 24.51B 7.30B -
divided by
Revenue 194.50B 246.18B 152.84B 198.66B 251.23B 62.00B 58.25B 55.52B 30.94B -
Gross Margin 31.05% 26.69% 26.22% 26.31% 100.00% 48.35% 48.70% 44.15% 23.60% -

High Capital Intensity over the past 10 years

COP spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

145.57% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 11.79B 19.10B - 9.76B 13.27B 14.17B 15.54B 17.09B 10.05B 4.87B
divided by
Net Income 11.89B -17.00B 4.86B 11.36B 12.44B 8.50B 9.22B 6.94B -4.37B -
Capital Expenditure Ratio 99.16% -112.36% - 85.94% 106.67% 166.77% 168.61% 246.25% -229.92% -

Very Strong Dividend History over the past 10 years

COP has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests COP is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 2.66B 2.85B 2.83B 3.18B 3.63B 3.28B 3.33B 3.53B 3.66B 1.25B
divided by
Shares Outstanding 1.65B 1.52B 1.50B 1.49B 1.39B 1.25B 1.24B 1.25B 1.24B -
Dividend Paid Per Share 1.62 1.87 1.89 2.13 2.62 2.62 2.69 2.83 2.95 -
Price at Year End 76.49 45.32 46.83 64.97 72.22 57.07 69.91 69.93 46.60 50.14
Dividend Yield 2.11% 4.13% 4.04% 3.28% 3.63% 4.58% 3.85% 4.05% 6.33% -

Strong History of Stock Buybacks over the past 10 years

COP has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 1.65B 1.52B 1.50B 1.49B 1.39B 1.25B 1.24B 1.25B 1.24B -
Stock Bought Back - 8.04% 1.72% 0.44% 7.50% 10.69% 1.07% -0.49% 0.32% -
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Discussion
Sort By:
1
Posted by pbanik  (on July 21, 2012)
COP is solid, but CVX is rated better.
1
Posted by Chris  (on July 21, 2012)
I agree. COP looks like solid performer.
1
Posted by Dan  (on June 18, 2012)
Looking ahead COP looks good to me