Morningstar | ConocoPhillips Continues to Impress, but Shares Close to FVE
ConocoPhillips finished the year on a strong note, increasing adjusted earnings to $1.3 billion from $0.5 billion a year ago thanks largely to higher oil and gas prices. Production totaled 1,313 thousand barrels of oil equivalent per day, an increase of 7% excluding the impact of acquisitions and dispositions, bringing full-year production to 1,242 mboed for growth of 5%. New volumes came largely from the unconventional portfolio, ongoing development in Europe and Alaska, and new project startups. Operating cash flow totaled $3.8 billion, easily covering capital investment and dividends. The company repurchased $900 million worth of shares during the quarter, completing its full-year $3 billion plan. Combined with dividends, the company returned about 35% of operating cash flow to shareholders. In 2019, the company expects to spend $6.1 billion to increase production to 1,300-1,350 mboed, by about 7%, and repurchase another $3 billion in shares. Our fair value estimate and narrow moat rating are unchanged.ConocoPhillips continues to offer an attractive mix of growth and cash returns to shareholders with upside exposure to oil prices. The asset divestitures of the past two years and improvement in cost structure have left the company with a more competitive portfolio that resulted in a moat upgrade to narrow. However, after a recent rally, the shares are trading close to our fair value estimate, leaving further upside likely dependent on higher oil prices.
ConocoPhillips is an exploration and production company engaged in exploring for, producing, transporting and marketing crude oil, bitumen, natural gas, liquefied natural gas and natural gas liquids. The company's segments include: Alaska, which operates in Alaska; Lower 48, which operates in the United States and the Gulf of Mexico; Canada, which operates in Alberta and British Columbia; Europe and North Africa, which consists of operations and exploration activities in Norway, the United Kingdom and Libya; Asia Pacific and Middle East, which operates in China, Indonesia, Malaysia, Australia, Qatar, and Timor-Leste; and Other International, which operates in Colombia, Chile and Argentina.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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