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Here's Why Hold Strategy is Apt for ConocoPhillips (COP) Now
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ConocoPhillips (COP - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days.
The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s 2023 and 2024 earnings are pegged at $9.09 and $11.67 per share, respectively.
Factors Working in Favor
The West Texas Intermediate crude price, trading at more than $76 per barrel, is highly favorable for upstream activities. Being a leading exploration and production company globally, ConocoPhillips is well-positioned to capitalize on handsome crude prices.
ConocoPhillips has secured a solid production outlook, thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, Permian Basin and Bakken shale. ConocoPhillips boasted that drilling and completion activities are increasingly getting efficient in all the key U.S. basins.
The current oil pricing landscape is highly favorable and is expected to continue, indicating a favorable business environment for the company’s exploration and production operations. We anticipate the favorable business trajectory to support the company in achieving 4.7% growth in total daily oil equivalent production for the current year.
The leading upstream energy company has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects that COP is better-positioned to rely on its strong balance sheet to withstand any adverse business scenario.
ConocoPhillips has a strong focus on returning capital to shareholders. In the third quarter, the company repurchased $1.3 billion of shares, and returned cash of $1.3 billion through ordinary dividends and variable return of cash. Also, ConocoPhillips has announced a quarterly ordinary dividend of 58 cents per share, indicating a 14% increase from the last paid-out dividend.
Risks
Being an upstream energy player, the overall operations of the company are exposed to volatility in oil and natural gas prices. Moreover, ConocoPhillips’ overall operating and production expenses continue to increase due to the inflationary market, hurting the bottom line.
The Williams Companies (WMB - Free Report) reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The guidance for the 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
Williams Companies' debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. Williams is also paying its shareholders an attractive dividend yielding around 5%. Besides, the company has a share repurchase program worth $1.5 billion, highlighting the commitment to shareholders.
Liberty Energy (LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of earnings of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.
Matador Resources Company (MTDR - Free Report) reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59 per share. MTDR’s milestone led to the better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, Matador expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the prior mentioned 143,000 BOE/D.
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Here's Why Hold Strategy is Apt for ConocoPhillips (COP) Now
ConocoPhillips (COP - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days.
The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s 2023 and 2024 earnings are pegged at $9.09 and $11.67 per share, respectively.
Factors Working in Favor
The West Texas Intermediate crude price, trading at more than $76 per barrel, is highly favorable for upstream activities. Being a leading exploration and production company globally, ConocoPhillips is well-positioned to capitalize on handsome crude prices.
ConocoPhillips has secured a solid production outlook, thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, Permian Basin and Bakken shale. ConocoPhillips boasted that drilling and completion activities are increasingly getting efficient in all the key U.S. basins.
The current oil pricing landscape is highly favorable and is expected to continue, indicating a favorable business environment for the company’s exploration and production operations. We anticipate the favorable business trajectory to support the company in achieving 4.7% growth in total daily oil equivalent production for the current year.
The leading upstream energy company has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects that COP is better-positioned to rely on its strong balance sheet to withstand any adverse business scenario.
ConocoPhillips has a strong focus on returning capital to shareholders. In the third quarter, the company repurchased $1.3 billion of shares, and returned cash of $1.3 billion through ordinary dividends and variable return of cash. Also, ConocoPhillips has announced a quarterly ordinary dividend of 58 cents per share, indicating a 14% increase from the last paid-out dividend.
Risks
Being an upstream energy player, the overall operations of the company are exposed to volatility in oil and natural gas prices. Moreover, ConocoPhillips’ overall operating and production expenses continue to increase due to the inflationary market, hurting the bottom line.
Stocks to Consider
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies (WMB - Free Report) reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The guidance for the 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
Williams Companies' debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. Williams is also paying its shareholders an attractive dividend yielding around 5%. Besides, the company has a share repurchase program worth $1.5 billion, highlighting the commitment to shareholders.
Liberty Energy (LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of earnings of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.
Matador Resources Company (MTDR - Free Report) reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59 per share. MTDR’s milestone led to the better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, Matador expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the prior mentioned 143,000 BOE/D.