Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its attractive valuation levels, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CONOCOPHILLIPS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 38.90% 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, COP's net profit margin of 16.20% compares favorably to the industry average.
- CONOCOPHILLIPS's earnings per share declined by 14.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CONOCOPHILLIPS reported lower earnings of $5.29 versus $7.61 in the prior year. This year, the market expects an improvement in earnings ($5.58 versus $5.29).
- COP, with its decline in revenue, underperformed when compared the industry average of 1.1%. Since the same quarter one year prior, revenues fell by 18.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
ConocoPhillips explores for, produces, transports, and markets crude oil, natural gas, natural gas liquids, liquefied natural gas and bitumen on a worldwide basis. ConocoPhillips has a market cap of $70.77 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 6.6, below the S&P 500 P/E ratio of 17.7. Shares are up 1.9% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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