Morningstar Rating

Stock Research and Analysis

by Allen Good, CFA

Bulls Say

Large positions in the Eagle Ford and Bakken offer low-cost liquids growth while offering lower risk and higher returns than international operations.
ConocoPhillips sports a dividend yield unrivaled by any other independent E&P. Prioritizing the dividend and a large cash balance should ensure the dividend is not cut if oil prices fall.
A rebound in natural gas prices will benefit ConocoPhillips, which holds a large position in U.S. natural gas. Read more 

Bears Say

ConocoPhillips' long-term growth rate of 3%-5% is low compared with E&P peers', while its ability to achieve cash flow growth rests on commodity prices recovering from the recent decline.
Capital spending plans may have to be cut if commodity prices fall, given it is outspending cash flow in the near term, potentially resulting in production growth below targets.
The company's efforts to high-grade the portfolio by divesting higher-cost assets may fall short given a lack of interested buyers. It has been unable to sell some of its Canadian assets. Read more 

Management

Ryan Lance, previously senior vice president of E&P, international, assumed the chairman and CEO role of ConocoPhillips after the spin-off. Lance's 26 years of industry experience and background in petroleum engineering should serve him well as   Read more 

Profile

ConocoPhillips is a U.S.-based independent exploration and production firm. In 2013, it produced 867,000 barrels per day of oil and natural gas liquids and 4.1 billion cubic   Read more 

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