ConocoPhillips (NYSE:COP) is an independent exploration and production company, with a market cap of more than $62 billion. If you are looking to add some oil stocks to your portfolio this month, take a look at ConocoPhillips.
According to a report from Motley Fool, ConocoPhillips’ main focus during the oil market downturn was to bring costs down as much as possible. The company was able to accomplish that goal. As a result, it can now grow production, fund a growing dividend, and generate free cash flow at current oil prices.
ConocoPhillips is now focusing increasing shareholder returns. This is a unique thing in its latest strategy.
“To achieve that aim, ConocoPhillips plans to allocate its growing cash flow toward a combination of high-return investments, increasing the dividend, buying back stock, and paying down debt. The company is already well under way with this plan, expecting to increase production 2% this year and already having announced a 6% dividend increase,” according to the report.
In addition, the oil and gas company wants to further jump-start shareholder returns by selling $5 billion to $8 billion of lower-margin North American gas assets in the near term. It intends to use cash proceeds to buy back as much as $3 billion of stock, with the balance used to push debt down toward its target level, the report said.
Analysts believe that those assets sales represent a compelling near-term catalyst for the ConocoPhillips’ stock price because they should unlock hidden value.
Here is a point.
“The market does not give the company much credit for these assets at the moment given their weaker margins and lower growth prospects. However, if ConocoPhillips can realize the full value of these assets, it could cause the market to assign this stock a much higher value.”
ConocoPhillips Fourth-Quarter Results
On Feb. 2, ConocoPhillips (NYSE:COP) reported its fourth-quarter 2016 financial results. It booked a loss of $35 million, or ($0.03) per share, compared with a fourth-quarter 2015 loss of $3.5 billion, or ($2.78) per share.
For the full-year 2016, the company posted a loss of $3.6 billion, or ($2.91) per share, versus a loss of $4.4 billion, or ($3.58) per share in 2015.
The company increased its quarterly dividend by 6% to 26.5 cents per share. The dividend will be paid March 1 to stockholders of record at the close of business on Feb. 14.
ConocoPhillips is engaged in the exploration, production, transportation, and marketing of crude oil, bitumen, natural gas and liquefied natural gas. The company operates through six operating segments defined by geographic region: Alaska; Lower 48; Canada; Europe and North Africa; Asia Pacific and the Middle East, and Other International.