COP  Conocophillips

Exchange

NYSE

Sector

Energy

Industry

Integrated oil Companies

Market Cap.

52.46B

Vuru Grade

11.84/100

Current Price

$43.11
+0.11 (+0.26%)

Growth Price

$26.28
Overvalued by 39.05%

Company Metrics

  • P/E 24.42
  • P/S 1.87
  • P/B 1.73
  • EPS -3.17
  • Cash ROIC -0.70%
  • Cash Ratio 0.53
  • Dividend 1.06 / 2.47 %
  • Avg. Vol. 8.04M
  • Shares 1.22B
  • Market Cap. 52.46B

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

ConocoPhillips Has Bought Back 29.4 Million Shares So Far in 2017. Should ...
Madison.com - Aug 18, 2017
Last November ConocoPhillips (NYSE: COP) outlined its strategy to create value amid a volatile oil market, along with actions to accelerate its value proposition.
ConocoPhillips - This Pure Upstream Oil Major Stands To Grow The Most
Seeking Alpha - Aug 8, 2017
ConocoPhillips has had a difficult time since the start of the oil crash, because the company operates only upstream assets.
ConocoPhillips: Earnings Preview
Seeking Alpha - Jul 22, 2017
ConocoPhillips (NYSE:COP), the world's largest independent oil and gas producer in terms of production and reserves, is gearing up to report its quarterly results before the markets open on Thursday, July 27.
Few Things investors Didn't Know About: ConocoPhillips (COP), NRG Energy, Inc ... - StockNewsJournal
Analysts Estimates And Ratings ConocoPhillips (COP) - News Oracle
ConocoPhillips receives consent for removal of minor structures at Ekofisk
WorldOil (subscription) - Aug 18, 2017
STAVANGER -- ConocoPhillips has received consent for preparations for and the start of the removal of minor structures from the Ekofisk field facilities, including the installation of a temporary crane on Ekofisk 2/4 FTP.
Conoco (COP) Gets Nod to Remove Minor Structures off Norway - Nasdaq
ConocoPhillips: Capped Upside For Now
Seeking Alpha - Aug 1, 2017
The quarterly results were meaningful in that ConocoPhillips returned to generating profits. The ability to return to profits after a couple of years of sizable losses is a testament to the amount of cost cuts undertaken for the company to profitably ...
ConocoPhillips in 3 Charts - Motley Fool
3 Key Takeaways From ConocoPhillips' Q2 2017 Earnings
Madison.com - Aug 11, 2017
This quarter's results seem to clearly indicate that ConocoPhillips is headed in the right direction. And while it would be nice to see an additional quarter or two of sustained positive adjusted net earnings, the market will likely have bid up the ...
ConocoPhillips accepts state terms to obtain leases
Alaskajournal.com - Aug 15, 2017
ConocoPhillips has agreed to comply with a long list contingencies demanded by Natural Resources Commissioner Andy Mack to allow the company to control a prized parcel of North Slope oil acreage.
ConocoPhillips trims capex after posting quarterly loss
Reuters - Jul 27, 2017
ConocoPhillips Chairman and Chief Executive Officer Ryan M. Lance (C) rings the closing bell at the New York Stock Exchange (NYSE), February 27, 2013.
ConocoPhillips Posts $3.4 Billion Q2 Loss - TheStreet.com
ConocoPhillips loses $3.4 billion; plans to cut spending - Chron.com
ConocoPhillips: FY Cash-Flow Guidance Largely Unchanged Despite Asset Sales
Seeking Alpha - Jul 30, 2017
Excluding special items, ConocoPhillips' (COP) reported Q2 adjusted earnings of $0.14/share versus a loss of -$0.86/share in the year earlier quarter.
ConocoPhillips quarterly beat underscores energy industry recovery
Financial Times - Jul 27, 2017
ConocoPhillips joined the procession of international oil and gas groups to announce forecast-beating second quarter results on Thursday, adding to signs of recovery in the sector.
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.

$43.11 Current Price

$26.28 Growth Price (DCF)

Overvalued by 39.05%


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