NEW YORK (TheStreet) -- ConocoPhillips (COP) - Get Report shares are gaining 0.35% to $63.29 in afternoon trading on Thursday as rising oil prices due to conflict in the Middle East lifted the energy sector today.
Oil prices rose today after Saudi Arabia launched airstrikes against the Houthi rebels in Yemen who are fighting to oust the country's president, who left Yemen Saturday to attend an Arab summit. Arab news sources say that he remains in the country as of Wednesday, however.
Yemen, while only responsible for a small percentage of global oil output, sits at an important strategic oil shipping position next to the Gulf of Aden.
In 2013, 3.8 million barrels a day passed through Bab el-Mandeb, the 18-mile wide choke point that sits between Yemen and Djibouti, and separates the Gulf of Aden from the Red Sea and the Suez Canal to the north.
Industry standard Brent crude for April delivery is up 3.49% to $58.45 per barrel while West Texas crude is gaining 2.5% to $50.44 per barrel in trading today.
TheStreet Ratings team rates CONOCOPHILLIPS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONOCOPHILLIPS (COP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- 35.76% is the gross profit margin for CONOCOPHILLIPS which we consider to be strong. Regardless of COP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.34% trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CONOCOPHILLIPS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $2,597.00 million or 33.59% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: COP Ratings Report