Skip to content

ConocoPhillips stock offers a buying opportunity for dividend investors

ConocoPhillips stock

ConocoPhillips (NYSE: COP) stock price has been trading in a narrow range over the past couple of months amid lower oil prices. The coronavirus impact and massive drop in oil prices have negatively impacted the performance of oil and gas producers in the past couple of months.

Several oil producers have slashed their dividends and investment plans in order to save cash during uncertain times. Despite the historical drop in oil prices, ConocoPhillips is among the few companies that have sustained dividends. It currently offers a quarterly dividend of $0.42 per share, yielding above 4.5%.

The shares of the largest US exploration and production company are down almost 44% so far this year. The dip in its share price is presenting a buying opportunity for long-term dividend investors. This is because ConocoPhillips has the potential to generate positive free cash flow even in the depressed oil price environment.  

COP ConocoPhillips daily Stock Chart
ConocoPhillips stock performance. Finviz chart

The company claims that its breakeven point stands below $40 a barrel. This means that ConocoPhillips has the potential to remain profitable at current oil prices. The company plans to restore its full production capacity by the end of the second quarter, which would help in enhancing revenue and earnings.

On the liquidity side, the company appears strong enough to pay dividends and invest in growth opportunities. ConocoPhillips ended the second quarter with $13 billion in liquidity, including cash and short-term investments of $7 billion. Meanwhile, its annual dividend payments stand around $1.5 billion.

ConocoPhillips stock is also likely to move higher in the coming days as economic data is pointing stronger than expected recovery. United States, Europe, and several other key Asian countries have lifted their economic forecasts amid declining virus infections and robust business activities. Its stock is down almost by half compared to 52-weeks high of $67 a share. The shares are currently trading around 17 times to earnings.  

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.