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ConocoPhillips (COP)’s Turnaround Continues to Unlock Value

ConocoPhillips appears undervalued
According to two valuation metrics that allow an apples-to-apples comparison of the relative valuation of oil companies ConocoPhillips appears undervalued. ConocoPhillips (NYSE:COP) is trading with a low enterprise value of five times EBITDA and 12 times its proved reserves. These valuation ratios are lower than many of its peers as the chart below illustrates.

Company EV to EBITDA EV to Proved Reserves
ConocoPhillips (NYSE:COP)



Chevron Corporation (NYSE:CVX)



Exxon Mobil Corporation (NYSE:XOM)



Occidental Petroleum Corporation (NYSE:OXY)



Anadarko Petroleum Corporation (NYSE:APC)



Source data: All companies listed second quarter 2013 Financial Filings.

They are also well below what is considered fair value for similar size oil explorers and producers. ConocoPhillips (NYSE:COP) also pays one of the best dividend yields among its peers with a quarterly dividend of $0.69 per share, giving it a yield of 4%.

Foolish final thoughts
ConocoPhillips (NYSE:COP) appears undervalued by the market. With its non-core asset divestment strategy in full swing along with a renewed focus on high-margin development, it is set to unlock further value for shareholders. Furthermore, with a solid dividend yield, patient long-term investors will continue to be rewarded for their patience as this strategy gains traction.

The article ConocoPhillips’ Turnaround Continues to Unlock Value originally appeared on

Matt Smith has no position in any stocks mentioned. The Motley Fool recommends Chevron. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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