ConocoPhillips (NYSE: COP) has been around since 1875 in one form or another, so it has a lot of experience dealing with the booms and busts in the energy patch. And this is one of those times when having a seasoned energy company like COP stock in your portfolio can be a real comfort.
COP stock is up 32% in the past year and that includes all the mess that we’ve been in recently. And it’s trading at a price-to-earnings ratio of 13, with a solid 1.8% dividend.
It’s an odd time in the energy patch, given that prices for oil are very low yet we’re technically in a recovery. Maybe the markets are pricing in concern whether this recovery can last but at this point, it seems that we can expect decent growth moving forward.
Some of this concern has been about the U.S.-China trade war as well. At the G20 in Argentina the leaders of both countries had a working dinner to talk about renewing trade talks that have broken down.
The takeaways were upbeat from President Trump and the markets reacted. But after the smoke cleared, it seemed the Chinese side of the table had a different view of what happened during the dinner.
And the markets took back what they had added.
What COP Stock Investors Should Keep in Mind
Now, there’s an OPEC meeting underway and the question is whether the Saudis will cut production to push oil prices higher. But President Trump has already signaled that he wants low oil prices and given the trouble the Saudi royal family is in regarding the killing of a U.S.-based journalist in their embassy in Turkey, they may want to appease the U.S. President.
Regardless of the geo-political wranglings around oil, the fact is COP has operations far beyond the U.S. and actually has partnerships with many state oil companies around the world.
What’s more, after the big oil price crash four years ago, the companies that survived are running much leaner than before and can make money at the current price points.
And COP isn’t just an oil producer and distributor. It is also a major player in natural gas, and natural gas prices have taken off in recent months.
COP just added to its natural gas fields in Canada recently, which will be helpful not only in distributing across North America, but can also be a potential export source.
While natural prices are up in the U.S., Europe and Asia pay three times or more for natural gas. As domestic exports start to increase, this will be a boon for COP stock.
The point is, COP has done a very good job during all the short-term chaos and it also has a very strong position long term. If you’re not interested in riding the market’s current roller coaster, COP may be a very good choice.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
