Conoco Phillips one of the world’s largest exploration
and production (E&P) companies. Profits and dividends have grown
approximately 9-13% annually over the last 10 years. In the same time
frame, COP has earned between a 10-20% return on
equity. The company should continue to make progress as a result of:
(1) its exposure to promising international regions,
(2) domestically, its capital expenditures will focus the
development of Eagle Ford Shale, Permian, Bakken and Barnett fields,
(3) splitting the exploration and production from the
refining and marketing should unlock value for shareholders,
(4) utilize its strong cash flow to pay down debt, raise
dividends and buy back stock.
Negatives:
(1) short term, its production will be impacted by the
shut down of its Libyan production,
(2) price fluctuations of oil and natural gas,
(3) its international operations are subject to political
risks.
Conoco is rated A++ by Value Line, has a 28% debt to
equity ratio and its stock yields approximately 4.6%.
Statistical Summary
Stock Dividend
Payout # Increases
Yield Growth Rate
Ratio Since
2004
COP
4.6%
10%
41%
9
Ind Ave
1.0
8
12
NA
Debt/
EPS Down Net
Value Line
Equity
ROE Since 2004
Margin Rating
COP
28%
18%
3
13% A++
Ind Ave
44
14
NA
18 NA
Chart
Note:
COP stock made great progress off its March 2009 low, quickly surpassing the
downtrend off its June 2008 high (straight red line) and the November 2008
trading high (green line). Long term the
stock is in an uptrend (blue lines).
Intermediate term, it is in a trading range (purple lines). The wiggly red line is the 50 day moving
average. The Dividend Growth and High
Yield Portfolios own 50% positions in COP, having Sold Half in late 2013. The upper boundary of its Buy Value Range is
$32; the lower boundary of its Sell Half Range is $71.
12/14
No comments:
Post a Comment