Latest news with #Conoco
Yahoo
6 hours ago
- Business
- Yahoo
ConocoPhillips Produces Lower FCF and Investors are Bored - But is COP Stock Too Cheap?
ConocoPhillips Inc. (COP) produced lower FCF in Q2, and investors seemed bored with the company. This is despite claims that it would boost free cash flow. Nevertheless, COP stock still looks too cheap here, based on its historical yield metrics. COP is at $93.28 in midday trading on Friday, Aug. 7, below its pre-earnings price action. For example, it peaked recently at $97.99 on July 29. More News from Barchart Lyft Stock Isn't a Smooth Ride After Earnings, But This Low-Risk, High-Reward Trade Gives It Gas Strategic Arbitrage: Post-Earnings Drama Causes Dynatrace's (DT) Call Spreads to be Favorably Mispriced Are Intel Options Traders Expecting the Chip Stock to Collapse This August? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Tepid Free Cash Flow Results ConocoPhillips reported on Aug. 7 that its Q2 operating cash flow (OCF) after working capital changes of $3.485 billion (see page 1 of the Supplemental Data tables). That was well below the $6.115 billion OCF in Q2 and $$4.919 billion in 2024 Q2. In addition, for the first 6 months, its OCF was $304 million lower than the H1 figures from last year (i.e., $9.6 billion in H1 2025 vs. $9.904 billion in H1 2024). That represents Y/Y decline of -3.1%. So, as you might expect, investors have not been impressed. Despite slightly lower capex spending (and not including net changes in W/C), ConocoPhillips' adjusted free cash flow (FCF) was reported as $1.4 billion. However, this did not cover the $2.2 billion cash dividends and share buybacks. This can be seen on page 9 of its shareholder deck. That could be why Conoco said in its earnings release it will find $1 billion more in cost reductions and margin enhancements. However, these savings, which could boost FCF, won't kick in right away. Conoco said it will take effect on a 'run rate basis by year-end 2026.' The net result is that Conoco's cash balance dropped, as it was used to finance the dividend and buybacks. That may be why COP stock has been flat for the past 6 months. Dividend Yield and Price Target The dividend per share (DPS) payment was kept stable at 78 cents for Q3. That gives the stock an annual DPS rate of $3.12. So, at today's price, COP has a 3.345% dividend yield: $3.12 DPS / $93.28 price = 0.03345 = 3.345% annual yield However, it seems likely that Conoco will raise its DPS next year. If it were to raise this by 5% to 82 cents quarterly, the next 12 months (NTM) dividend payments would be: $0.78 +($0.82 x 3) = $3.24 forward DPS As a result, its forward dividend yield is higher at 3.473% (i.e., $3.24 / $93.28). However, that is well below its historical dividend yield. For example, Yahoo! Finance reports that the 5-year average has been 2.64%. Similarly, Seeking Alpha says it's been 2.95%. Therefore, assuming COP stock eventually reverts to its mean yield of 2.795%, it could trade at: $3.24 DPS / 0.02795 = $115.92 target price That provides a potential upside of +24.3% from today's price. Analysts Agree COP is Undervalued Yahoo! Finance says the average of 28 analysts is $116.93, and Barchart's mean survey price is $115.36. Moreover, some surveys have higher price targets. For example, Stock Analysis shows that 16 analysts have an average of $120.38, and reports that 21 analysts have an average of $118.90. So, the average analyst survey price target is $117.89, representing a potential upside of +26.4%. The bottom line is that, assuming ConocoPhillips can get its act together, including raising its FCF profile, COP stock looks undervalued. The problem is that this could take a while, and COP stock may not reach this upside right away. As a result, it makes sense to set a lower buy-in price and collect income by shorting one-month out put options in lower strike prices. Shorting OTM Puts in COP For example, look at the Sept. 5 expiry chain shows that the $90.00 strike price put option has a midpoint premium of $1.63. This strike price is over 3.5% below today's price, i.e., it's out-of-the-money (OTM) and represents a potential lower buy-in point for an investor. In return, the investor receives an immediate yield of 1.81% (i.e., $1.63/$90.00 = 0.01811 = 1.811%). This means that an investor who secures $9,000 in cash or buying power, after ending an order to 'Sell to Open' 1 put contract at $90.00, can make $163.00. The $9,000 acts as collateral in case COP falls to $90.00 and the account is assigned to buy 100 shares. The point is that the breakeven price is lower at $90.00 - $1.63, or $88.37. That represents a 5.2% lower buy point for an investor. More risk-averse investors can look to sell short the $89.00 put strike price. That premium is lower at $1.30, but the one-month yield is still attractive at 1.46% (i.e., $1.30/$1.89). The bottom line is that this is a way for investors to get paid while waiting to see if COP stock will fall. It also allows an investor to get a lower buy price while waiting. Investors can learn more about how this works at the Barchart Options Learn Center, where there are a series of tutorials explaining various options strategies. For example, two popular strategies are covered call and short-put plays. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. 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Yahoo
24-06-2025
- Business
- Yahoo
If Iran Closes the Strait of Hormuz, These 3 U.S. Oil Stocks Could Soar
ConocoPhillips is one of the largest oil companies in the world with a huge percentage of production in the United States. EOG Resources is entirely U.S.-focused has been excellent at returning more cash to shareholders. Occidental Petroleum is a Buffett favorite, in large part because of its deep inventory in the Permian Basin. 10 stocks we like better than Occidental Petroleum › While it appears as though a temporary ceasefire may be on the horizon, the war between Israel and Iran is likely to linger into the future, with the U.S. now involved to a degree after last weekend's bombings of Iran's nuclear facilities. If things were to re-escalate, the Iranian regime could take a worst-case, most damaging counter-measure by blockading the Strait of Hormuz, the narrow waterway between Iran and Oman through which 21% of the world's oil consumption flows. If that were to happen, oil prices would spike in the short term and stocks would probably move lower. However, the following U.S.-focused oil and gas giants would each benefit, with one being a Warren Buffett favorite. ConocoPhillips (NYSE: COP) is one of the largest U.S.-based oil and gas giants, which also has a very high concentration of its exploration and production in the United States. Although ConocoPhillips is diversified geographically, about 75% of its operating earnings come from the contiguous U.S., Canada, and Alaska. The next largest segment is in the Pacific, across China, Malaysia, and Australia. A remaining 12.5% or so of its earnings comes from Europe, Middle East, and North Africa. While ConocoPhillips does have some production in Qatar, which would be affected by the closing of the Strait of Hormuz, that production is just a portion of this segment, and thus a small fraction of Conoco's overall production. Conoco currently trades fairly cheaply, at just 11.6 times earnings with a 3.4% dividend yield, reflecting a low-growth outlook. However, if oil prices were to spike, management says that for every $1 increase in the price of Brent crude oil, Conoco would increase its operating cash flow by $65 million to $75 million. For every $1 increase in West Texas Intermediate, Conoco would see an additional $140 million to $150 million. Conoco gives investors the strength of a very large-cap oil company with an excellent balance sheet and relatively low debt for its size, at less than equal to EBITDA. So it's a risk-off play for those who nevertheless would like concentrated exposure outside the Middle East. EOG Resources (NYSE: EOG) is present in most of the major shale plays in the United States, along with exploration properties in Trinidad and Tobago. As a 100% U.S.-based producer, EOG's cargos obviously don't flow anywhere near the Strait of Hormuz. EOG has also been an excellent operator, having steadily ramped its cash flow, and along with it, total shareholder returns. Between 2021 and 2024, EOG has more than doubled its dividend, which now yields 3.3%, while also adding share repurchases. In that same time span, EOG has increased its total shareholder payouts, dividends and repurchases included, from 48% of free cash flow to 98%. EOG has also been able to garner higher-than-average oil and gas price realizations than its peers, thanks to its well positioning near low-cost pipelines and storage operators, which enables EOG to realize more of its oil and gas sales than others. That means if the price of oil spikes on a Middle East geopolitical conflict, EOG Resources could disproportionately outperform. EOG has been able to return so much cash to shareholders because of its excellent balance sheet, which is actually unlevered, with more cash than debt. As such, it's another low-risk way to play U.S. shale. A third great option for U.S.-focused investors is Warren Buffett holding Occidental Petroleum (NYSE: OXY). Although Occidental does have some of its production in the Middle East, specifically Oman, which would be affected by any closure of the Strait of Hormuz, about 84% of its production comes from the U.S., with over half of its total production concentrated in the oil-gushing, low-cost Permian Basin in West Texas, where Occidental has 2.9 million acres of land. Occidental's onshore inventory is also very deep, with 13 years of production at the today's rates at breakeven prices below $60 per barrel, with 10 years of inventory with breakeven costs under $50, and a good portion of those wells having breakeven costs below $40. Meanwhile, Occidental has a history of lowering costs over time, opening up more of its inventory. On the recent earnings release, Occidental management noted that it had reduced well costs by 12% across its U.S. fracking portfolio since 2023. As the company with some of the deepest inventory in the Permian Basin, Occidental is very well positioned for the long term, which is probably why Buffett is such a fan. And of course, if non-U.S. supply was cut off for any reason, because of the closing of the Strait of Hormuz or some other geopolitical event, Occidental would be a prime beneficiary. That being said, Occidental also has a higher debt load than the other companies mentioned, especially after its $12 billion acquisition of CrownRock last year. So that's something for investors to monitor. However, should the price of oil spike, Occidental may have more upside as a leveraged play on U.S. oil and gas. Before you buy stock in Occidental Petroleum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Occidental Petroleum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor's total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Billy Duberstein and/or his clients have positions in ConocoPhillips. The Motley Fool has positions in and recommends EOG Resources. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy. If Iran Closes the Strait of Hormuz, These 3 U.S. Oil Stocks Could Soar was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
18-06-2025
- Business
- Yahoo
Citi Cuts ConocoPhillips' (NYSE:COP) PT but Maintains Buy
ConocoPhillips (NYSE:COP) is one of the 10 stocks that Jim Cramer and analysts are watching. Citi cut its price target on the stock from $140 to $115 but kept a Buy rating on June 11. The stock has dropped to its lowest level in four years compared to the U.S. energy index, which has reversed the gains from its major acquisitions. The firm views this decline as a chance to invest in a company that can stay strong and stand out, while OPEC's latest approach challenges others. Citi continues to see strong upside in the shares. An underground network of pipelines transporting oil through an expansive terrain. During the June 9 episode, Cramer recommended to 'sell' ConocoPhillips (NYSE:COP) and buy another, as he said: 'I like your idea. I like your idea. I like your idea. I think Lily's at a great level, and Conoco is not nearly as all the oils go to like 4 or 5% yield, this is only three and a half. I want you to sell the Conoco and buy the Lilly. I like that idea.' ConocoPhillips (NYSE:COP) is involved in the exploration, production, transportation, and marketing of crude oil, natural gas, LNG, and related products. The company's operations span both unconventional and conventional assets, including global LNG projects, oil sands, and a broad range of exploration prospects. While we acknowledge the potential of COP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
- Yahoo
Why ConocoPhillips Stock Just Popped
Mideast conflict means higher oil prices. Brent and WTI crude prices spiked Friday on news of an Israeli attack on Iran. 10 stocks we like better than ConocoPhillips › ConocoPhillips (NYSE: COP) stock is on the rise Friday morning, up 2.5% through 10:55 a.m. ET, on worrisome news from the Middle East. On Thursday evening, Israeli warplanes struck multiple targets in Iran, resulting in drone strikes from Iran on Israel. Investors are nervous that conflict in the Middle East will threaten the supply of oil from Mideast suppliers, raising oil prices. So far, investors seem to be right about that. According to the latest data from WTI crude oil shot up nearly $5 today, the biggest one-day gain since 2022, to $72.70 per barrel. International benchmark Brent Crude is up a similar amount, selling for just under $74 a barrel. While this might be a blip, it's a big one. And my hunch is it's not a temporary adjustment, as the conflict between Israel and Iran is likely to get worse before it gets better, and could even draw in neighboring countries, affecting oil supplies from the broader region. From an investors' perspective, of course, these kinds of worries do encourage a focus on oil stocks, which may benefit as oil prices rise, and oil profits increase. In the case of Conoco, we're looking at a global giant that earned $9.2 billion in profit last year even before prices began rising, and that trades for only about 12.6 times trailing earnings today With a 3.3% dividend yield, the stock should perform well so long as Conoco can maintain a 10% or better earnings growth rate. Mideast tensions should help make that more likely, and lift the stock past analyst forecasts for 7% long-term earnings growth. All things considered, I think Conoco stock looks like a reasonable way to play the situation. Before you buy stock in ConocoPhillips, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and ConocoPhillips wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why ConocoPhillips Stock Just Popped was originally published by The Motley Fool Sign in to access your portfolio
Press and Journal
01-06-2025
- Business
- Press and Journal
Dave and Alison's dream renovation on £1.2m Ellon home
Who: 'F1 addict' and retired managing director's advisor Dave Forbes, 74, and his wife, Alison, 66, who worked in logistics at Conoco, plus their adorable golden retriever, Blue. What: Milton Of Leask House, a gorgeous countryside home with five bedrooms, a dog grooming cabin, views of Bennachie, resident swans plus a self-contained flat above the double garage. Where: Around five miles from Ellon, less than a ten minute drive from Collieston. Back in 2011, I had just retired from working as managing director's advisor at IPIC (International Petroleum Investments Company). We had a very busy life in the Middle East – mainly Abu Dhabi – for 27 years. At the end of my career, I worked with the Mercedes Formula 1 team which was particularly enjoyable for me. I was a lifetime Formula 1 addict, and got to meet drivers like Nico Rosberg and Lewis Hamilton. Coming back to the UK meant that we could have our own property. Because, living overseas, we lived in rental accommodation all the time with no opportunity to make it our own. So that was the driving thing for me. We finally had our own house and we could do whatever we wanted to do with it. We saw the property on the ASPC website, and it was like a dream come true. Our first impressions were of the lovely ponds and wildlife, including resident wild ducks and swans, the spacious and lavish greenery of the woodlands, and the unspoilt tranquillity of the area. It was in good condition at the time, but we felt that it was perhaps a little dated, and it didn't take full advantage of the available space. The way it was configured never really worked for us. We wanted to change the flow of the property so that it suited us better. We started in 2011 with the utility room. It was basically just a porch at the back of the house, and not really usable as a utility room – that, for me, was the most important change that we make quickly. Then we started on the bathrooms, and upgraded all of them. We just ripped everything out and started again. The self-contained flat above the garage wasn't really habitable for more than a night or two, so we upgraded that completely. And we installed the office. The biggest area we had to tackle was the kitchen. When we came here, the flooring was really outdoor flooring and it definitely wasn't suitable for domestic use indoors. We took it all up, dug it all out and re-laid the slab for the house. It was a a big job but it was a pleasure to get rid of the flooring because it was such a pain to live with. But it gave us the opportunity to rearrange the layout of the kitchen, install other electrical points and cables under the floor. The kitchen is my favourite part of the house now. I love to cook, so it's all based around that for me in the kitchen. For me, my favourite part is the office. I can sit in peace, surrounded by my computers and play to my heart's content. I don't mean playing games, I don't do that, but I can mess around with IT to my heart's content. It's comfortable, well-lit, quiet. It couldn't suit me better. As for outside, we added a greenhouse, dog cabin, tool shed, and henhouse. Before our golden retriever Blue, we had his mum and a couple litters of puppies. We get a lot of rain here and the retrievers would come home covered in mud, so it was essential to have a dog spa. Blue, in particular, is a large dog with the equivalent of size 12 feet. If he comes into the house at any time after being out for a muddy walk, it's a catastrophe! There's a dog bath which has a hydraulic lift so it can be lowered for the dog to get in and lifted to waist height so that the dogs can be washed and dried. It makes it easier for us humans as well. There's a dog hair dryer installed too. And we have an infrared ceiling mounted heater so that in winter they don't get cold. Blue loves the outside space here too. We have ponds, and we get a lot of wild ducks. We have had resident swans here every year since we moved here. They have bred here every year till this year. They have been phenomenal. Mr. Swan and I have had a few run-ins over the years, but we get on pretty well now. I was once helping get the swans back over to the pond when they found themselves in a field surrounded by cattle. I put them into a tub one by one to bring them home, and Mr. Swan didn't fully comprehend that I was trying to help, and he launched a full-blown attack. The swans were reunited within a short time as well – and my bruises healed pretty quickly too! Mr. Swan and I have had a great relationship since then. We feed them as well. It's really nice to have them right there on our doorstep. In renovating our home, we wanted to achieve an authentic, quality finish, that was consistent with the look and feel of the house when we purchased it. Our greatest challenge was to ensure that all our renovations were internally consistent, and conveyed a common theme of top quality. We like to think that we were largely successful in this endeavour. It's nice to reach a point where you can draw a line under all the improvements you wanted to make, and see them finished. It has been really rewarding.' Milton Of Leask House, Ellon, is on the market for offers over £1,200,000. To arrange a viewing contact Raeburn Christie Clark and Wallace on 01358 720777 or check out the website
