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ConocoPhillips Message Board

  • sollid_companiess_only sollid_companiess_only Jun 11, 2014 2:45 PM Flag

    Howard Weil Says COP is Best of Class of Oil Investments

    ConocoPhillips ‘Best Opportunity,’ Howard Weil Says
    .
    By Ben Levisohn

    Thinking of buying an oil company? You could do worse than ConocoPhillips (COP), according to the folks at Howard Weil.

    Agence France-Presse/Getty ImagesHoward Weil’s Blake Fernandez explains why he prefers ConocoPhillips to other oil companies like Total (TOT) and Chevron (CVX):

    After years of portfolio rationalization, concerns re: dividend coverage, etc. the asset base is now poised to deliver 6- 10% cash flow CAGR through ’17 from a combination of 3-5% production growth and 3-5% margin expansion. Additionally, our confidence in the Company’s unconventional prowess is increasing based on the recent analyst day presentation, higher production targets and efficiency gains in the underlying assets…

    We feel COP has the best opportunity to grow beyond its current valuation multiple as cash flow and EPS increase over the coming years. Once the Company reaches cash flow breakeven (anticipated around ’16 depending on commodity prices) we see an opportunity to re-rate the stock from a dividend yield perspective (COP 3.4% vs. U.S. IOC’s 3% & E&P peer avg 1.4%). We are upgrading from Sector Perform to Sector Outperform based on relative attractiveness to the group. Combining ~10% upside in share price appreciation potential with ~3.4% dividend yield, we believe COP offers ~14% total return from current levels.

 
COP
75.00-1.52(-1.99%)Oct 1 4:02 PMEDT

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