ConocoPhillips (COP) is smaller these days after spinning off its refining operations as Phillips 66 (PSX) in 2012. But that has allowed the core exploration and production business of COP to shine thanks to the shale boom — free from volatility in the refining segment of the energy market.
After shedding billions of dollars in foreign and non-core assets, ConocoPhillips invested big on U.S. shale fields such as the Bakken formation in the Dakotas, and production has been soaring as a result. For instance, COP saw adjusted production of 1.51 million barrels of oil equivalent per day last quarter vs. 1.489 million a year ago. That’s only a modest uptick on paper, but for a company this scale it’s mighty impressive.
Energy prices always move higher when inflation takes hold, so it’s important to have some oil and gas exposure in your portfolio as a hedge. When you throw in the 3.8% dividend, too, it makes the case for Conoco even more compelling.