ConocoPhillips Company is an American multinational energy corporation headquartered in Texas. It is the fifth largest private energy company in the world and was created by the merger of Conoco Inc and Phillips Petroleum Company on August 30, 2002. The company ConocoPhillips employs approximately 29,600 people worldwide in nearly 40 countries. ConocoPhillips is the second-largest refinery in the United States and the fourth-largest privately owned refinery in the world. The company operates in all sectors of the oil and natural gas industry: exploration, production, midstream, refining, marketing and petrochemicals.
COP offers a long term performance generous at 3.36%, the current yield being even more so, at 4%. The price/earnings ratio confirms this attractive valuation, at only 8.50. Dividends are growing at a sustained annual rate of 12,38% (average of the last four years). The payments have been able to be increased for ten consecutive years, which is good, but not very much compared to the other stocks in our portfolio. The distribution ratio is very conservative, at 31.92%, which leaves a good margin for the company to continue to increase its dividend in the future, even in the event of a difficult passage.
These interesting fundamentals are unfortunately tarnished by a high risk, with a volatility of 22.13% and a beta of 1.16, which is much higher than the stocks that make up our portfolio and even higher than the market. The stock tends to underperform the S&P over the long term, which partly explains its attractive valuation. On the other hand, during the "lost decade", COP allowed itself a nice performance.
COP offers good protection against dollar fluctuations.
COP offers a generous and rapidly growing yield. However, the youth of its successive distribution increases, as well as the stock's high volatility, mean that we remain on the sidelines of COP for the time being.
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How do you view the upcoming spin-off? Conoco Phillips will keep its Exploration and Production division and divest all Downstream activities. With the proceeds of the sale, it plans to buy back shares and increase its dividend.
It all depends on what they do with it. Hopefully it won't be in the form of a special dividend. The most important thing is that COP can maintain its sustained rate of growth in its distributions over the long term.