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ConocoPhillips - >>> 7 Best Energy Stocks to Ride Out Oil's Recovery


Kiplinger

by Aaron Levitt

May 12, 2020


https://finance.yahoo.com/news/7-best-energy-stocks-ride-201136371.html


Market value: $45.3 billion

Dividend yield: 4.0%

"Déjà Vu" is French for "already seen." And for major independent energy producer ConocoPhillips (COP, $42.27) ... well, it has seen something like this before.

Back in 2014, the last time crude oil took a serious plunge, ConocoPhillips was a different animal. It was full of expensive projects and bloated capital spending requirements, and it wasn't nearly the shale player it was today. In the years since, Conoco sold expensive deep-sea operations, cut its dividend, paid off debt and become a shale superstar. This "lean and mean" operation worked, and COP became the blueprint for many other energy firms.

That also prepared ConocoPhillips to better withstand the current low-oil environment.

Yes, COP did decide to tighten its belt in March and April, announcing capital expenditure, output and share repurchase reductions. And yes, ConocoPhillips did lose $1.7 billion during the first quarter. But it still managed to generate $1.6 billion in cash flows from operations - enough to pay its dividend, expenditures and buybacks. The company also finished the quarter with more than $8 billion in cash and short-term investments, and more than $14 billion in liquidity once you factor in the $6 billion left on its revolver.

In fact, the company's in a good enough position that CEO Ryan Lance told CNBC he's "on the lookout" for acquisition targets.

Conoco, in taking its lumps years ago, became a better energy stock. That should give investors confidence in its ability to navigate this crisis.

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