COP  Conocophillips

Exchange

NYSE

Sector

Energy

Industry

Integrated oil Companies

Market Cap.

58.78B

Vuru Grade

20.43/100

Current Price

$47.51
-0.83 (-1.72%)

Growth Price

$19.25
Overvalued by 59.49%

Company Metrics

  • P/E 24.42
  • P/S 2.49
  • P/B 1.66
  • EPS -2.91
  • Cash ROIC 0.49%
  • Cash Ratio 0.26
  • Dividend 1.06 / 2.19%
  • Avg. Vol. 7.01M
  • Shares 1.24B
  • Market Cap. 58.78B

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

Better Buy: Sunoco LP vs. ConocoPhillips
Motley Fool - Feb 14, 2017
Their names might rhyme, but Sunoco LP (NYSE:SUN) and ConocoPhillips (NYSE:COP) are two very different companies. Of course, it wasn't always that way.
Exclusive: ConocoPhillips puts Canadian natgas assets on the block - sources
Reuters - Feb 16, 2017
When contacted by Reuters, ConocoPhillips spokesman Rob Evans pointed to an announcement last November that said the company could sell up to $8 billion in natural gas assets.
Reuters: ConocoPhillips puts Canadian nat gas assets up for sale - Seeking Alpha
ConocoPhillips to Raise Dividends 6% (COP)
Investopedia - Feb 14, 2017
ConocoPhillips Co. (COP) has announced that they're raising shareholder dividends after a narrow loss on their 4Q earnings report, due to lowered costs and new oil discoveries in Alaska.
ConocoPhillips Will Focus On Returning Value To Shareholders With Steady ...
Forbes - Feb 3, 2017
ConocoPhillips, one of the largest independent oil and gas companies, has emerged as a dark horse in this earnings season. In a quarter where most of the big names in the oil and gas industry, such as Exxon Mobil and Chevron, have reported an earning ...
3 Reasons ConocoPhillips Stock Could Rise - Motley Fool
ConocoPhillips: A History Lesson In Seemingly Poor Performance
Seeking Alpha - Feb 10, 2017
At the end of 2009, shares of ConocoPhillips (NYSE:COP) were trading hands at a price near $51. Today the mark is just under $50 - it's been over seven years and the price is more or less where it was.
The 3 Standout Numbers From ConocoPhillips' Fourth-Quarter Results
Motley Fool - Feb 2, 2017
ConocoPhillips (NYSE:COP) has undergone a significant transformation over the past few years to reposition the company so it can thrive at lower oil prices.
ConocoPhillips Reports Smaller Quarterly Loss - Fox Business
ConocoPhillips Reports Smaller-Than-Expected Loss - TheStreet.com
ConocoPhillips: What Is The Company Thinking?
Seeking Alpha - Feb 6, 2017
As the large integrated oil companies kept their dividends, ConocoPhillips had a better cash flow position. Despite reporting another loss during Q4, the company actually returned to increased capital returns.
How Did ConocoPhillips Fare in 4Q16? - Market Realist
Analyst Activity – RBC Capital Markets Reiterates Buy on ConocoPhillips (NYSE:COP) - Market Exclusive
ConocoPhillips Is Firing On All Cylinders
Seeking Alpha - Feb 5, 2017
ConocoPhillips produced 1.59 million barrels of oil equivalents per day (ex. Libya) in 4Q 2016, roughly flat from a year earlier.
ConocoPhillips (COP) Rewards Investors with Dividend Hike - Zacks.com
ConocoPhillips (COP) Trims Losses, Well Set to Generate Profits in FY2017 - Economic Calendar
ConocoPhillips: Better Days Ahead
Seeking Alpha - Feb 3, 2017
ConocoPhillips announced Q4 2016 earnings yesterday, capping off a full year of strengthening the balance sheet and creating cash flow stability.
ConocoPhillips: Buying Opportunity On Dips
Seeking Alpha - Jan 31, 2017
Any fall in price for ConocoPhillips (NYSE:COP) should be treated as a buying opportunity. Especially, if that pullback brings the stock price to below $50.
ConocoPhillips' 4Q'16 Earnings To Show Strong Improvement Driven By Oil Price ... - Trefis
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.

$47.51 Current Price

$19.25 Growth Price (DCF)

Overvalued by 59.49%


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

$44.34 Book Price

Overvalued by 6.67%


Poor Cash Return on Invested Capital over the past 5 years

COP has been unable to consistently generate sufficient returns from 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 only created $0.49 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 6.38B -250.00M 550.00M -350.00M -2.48B
divided by
Invested Capital 118.80B 96.08B 96.41B 99.94B 85.86B
Cash ROIC 5.37% -0.26% 0.57% -0.35% -2.89%

Inconsistent Return on Equity over the past 5 years

COP has generated adequate returns with capital that shareholders have invested. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

COP has generated $11.37 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 12.44B 8.50B 9.22B 6.94B -4.37B
divided by
Stockholders' Equity 65.22B 47.99B 52.09B 51.91B 39.76B
Return on Equity 19.07% 17.71% 17.69% 13.37% -10.99%

Good Business Performance over the past 10 years

It's likely COP has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is COP has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

COP has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 5.92B 12.76B 3.56B 12.48B 7.28B 6.38B -250.00M 550.00M -350.00M -2.48B

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
2006200720082009201020112012201320142015
Cash 817.00M 1.46B 755.00M 542.00M 11.51B 6.36B 3.62B 6.52B 5.06B 2.37B
Current Assets 25.07B 24.74B 20.84B 21.17B 34.66B 30.22B 23.99B 19.02B 15.07B 8.79B
Total Assets 164.78B 177.76B 142.87B 152.59B 156.31B 153.23B 117.14B 118.06B 116.54B 97.48B
Current Liabilities 26.43B 26.88B 21.78B 23.70B 27.42B 28.07B 17.44B 15.13B 11.54B 9.26B
Total Liabilities 82.14B 88.77B 87.70B 90.12B 87.75B 88.01B 69.16B 65.97B 64.63B 57.72B
Stockholder' Equity 82.65B 88.98B 55.17B 62.47B 68.56B 65.22B 47.99B 52.09B 51.91B 39.76B
Current Ratio 0.95 0.92 0.96 0.89 1.26 1.08 1.38 1.26 1.31 0.95
TL-to-TA 0.50 0.50 0.61 0.59 0.56 0.57 0.59 0.56 0.55 0.59

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
2006200720082009201020112012201320142015
Retained Earnings 41.29B 50.51B 30.64B 32.66B 40.40B 49.19B 35.34B 41.16B 44.50B 36.41B
Retained Earnings Growth - 22.32% -39.33% 6.58% 23.70% 21.78% -28.17% 16.48% 8.12% -18.18%

Competitive Industry over the past 10 years

COP is likely operating in an industry with medium to low barriers to entry. This may mean that COP doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that COP invests heavily in R&D and Sales, General & Administrative expenses.

Only $5.02 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 15.55B 11.89B -17.00B 4.86B 11.36B 12.44B 8.50B 9.22B 6.94B -4.37B
divided by
Revenue 167.58B 194.50B 246.18B 152.84B 198.66B 251.23B 62.00B 58.25B 55.52B 30.94B
Net Profit Margin 9.28% 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.

$39.74 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
2006200720082009201020112012201320142015
Gross Profit 37.43B 60.38B 65.70B 40.07B 52.27B 251.23B 29.98B 28.37B 24.51B 7.30B
divided by
Revenue 167.58B 194.50B 246.18B 152.84B 198.66B 251.23B 62.00B 58.25B 55.52B 30.94B
Gross Margin 22.34% 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.

139.10% 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
2006200720082009201020112012201320142015
Capital Expenditure 15.60B 11.79B 19.10B - 9.76B 13.27B 14.17B 15.54B 17.09B 10.05B
divided by
Net Income 15.55B 11.89B -17.00B 4.86B 11.36B 12.44B 8.50B 9.22B 6.94B -4.37B
Capital Expenditure Ratio 100.30% 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
2006200720082009201020112012201320142015
Dividend Paid 2.28B 2.66B 2.85B 2.83B 3.18B 3.63B 3.28B 3.33B 3.53B 3.66B
divided by
Shares Outstanding 1.61B 1.65B 1.52B 1.50B 1.49B 1.39B 1.25B 1.24B 1.25B 1.24B
Dividend Paid Per Share 1.41 1.62 1.87 1.89 2.13 2.62 2.62 2.69 2.83 2.95
Price at Year End 60.42 76.49 45.32 46.83 64.97 72.22 57.07 69.91 69.93 46.60
Dividend Yield 2.34% 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
2006200720082009201020112012201320142015
Shares Outstanding 1.61B 1.65B 1.52B 1.50B 1.49B 1.39B 1.25B 1.24B 1.25B 1.24B
Stock Bought Back - -2.21% 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