It hasn't been a great afternoon session for ConocoPhillips investors, who have watched their shares sink by -1.3% to a price of $111.98. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
a Very Low P/E Ratio but Priced at a Premium:
ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of 13.62 and an average price to book (P/B) ratio of 1.86. In contrast, ConocoPhillips has a trailing 12 month P/E ratio of 13.3 and a P/B ratio of 2.58.
ConocoPhillips has moved -1.8% over the last year compared to 29.8% for the S&P 500 — a difference of -31.6%. ConocoPhillips has a 52 week high of $135.18 and a 52 week low of $101.3.
Growing Revenues but an Average Current Ratio:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $38,727 | $36,670 | $18,784 | $45,828 | $78,494 | $56,141 |
| Operating Margins | 26% | 26% | -17% | 28% | 36% | 28% |
| Net Margins | 16% | 20% | -14% | 18% | 24% | 20% |
| Net Income (M) | $6,257 | $7,189 | -$2,701 | $8,079 | $18,680 | $10,957 |
| Net Interest Expense (M) | $735 | $778 | $806 | $884 | $805 | $780 |
| Depreciation & Amort. (M) | $5,956 | $6,090 | $5,521 | $7,208 | $7,504 | $8,270 |
| Diluted Shares (M) | 1,176 | 1,124 | 1,078 | 1,328 | 1,278 | 1,206 |
| Earnings Per Share | $5.32 | $6.4 | -$2.51 | $6.07 | $14.57 | $9.06 |
| EPS Growth | n/a | 20.3% | -139.22% | 341.83% | 140.03% | -37.82% |
| Avg. Price | $55.48 | $52.48 | $36.6 | $54.29 | $91.26 | $112.14 |
| P/E Ratio | 10.35 | 8.16 | -14.58 | 8.91 | 6.24 | 12.35 |
| Free Cash Flow (M) | $6,184 | $4,468 | $87 | $11,672 | $18,155 | $8,717 |
| CAPEX (M) | $6,750 | $6,636 | $4,715 | $5,324 | $10,159 | $11,248 |
| EV / EBITDA | 4.66 | 4.44 | 21.82 | 4.44 | 3.6 | 6.11 |
| Total Debt (M) | $14,968 | $14,895 | $15,369 | $19,934 | $16,643 | $18,937 |
| Net Debt / EBITDA | 0.57 | 0.63 | 5.2 | 0.75 | 0.29 | 0.54 |
| Current Ratio | 1.79 | 2.4 | 2.25 | 1.34 | 1.46 | 1.43 |
ConocoPhillips benefits from growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and generally positive cash flows. The company's financial statements show positive EPS growth and healthy leverage levels. Furthermore, ConocoPhillips has just enough current assets to cover current liabilities, as shown by its current ratio of 1.43.
