Two of the largest independent oil and gas companies specializing in upstream operations are ConocoPhillips and Occidental Petroleum Corporation. They're organized as corporations rather than Master Limited Partnerships (MLP) so they won't appear in the section of this website titled E&P MLPs. They do, however, operate in the same space. And I'm always interested in upstream oil and gas companies.
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ConocoPhilips, until recently, was a major integrated oil company along the likes of ExxonMobil and Chevron. But with the spinoff of Phillips 66 the company has jettisoned its midstream and downstream operations and concentrated on the upstream portion of their operations. ConocoPhillips today has become an upstream exploration and production oil and gas company with world wide operations.
Occidental Petroleum, on the other hand, is an oil and gas company that has always been concentrated on upstream operations but has also developed midstream operations and a chemical business. As a result, the two companies can't be compared to each other on a strictly organizational basis, but they're similar enough to be compared on the basis of their fundamentals. And with a little effort (beyond the scope of this article) these two companies can be compared to the E&P MLPs to determine the best place to invest future funds.
A quick look at the numbers below illustrate the difficulty investors have in deciding on which company to invest in. At first blush an investor interested in capital gains will surely select ConocoPhillips because of its one year total shareholder return (18.28%). The dividend growth investor will select Occidental Petroleum Corp because of its dividend growth rates (16.16%-20.08%).
Which company an investor decides to invest in will provide unique psychological insight into their own investing philosophy. It's information that every investor should know and comes to terms with in order to become a better investor.
Hopefully this look into the fundamentals of ConocoPhillips and Occidental Petroleum will provide a small glimpse into the benefits of owning these two companies and allow investors to decide which company deserves a more thorough analysis.
| ConocoPhillips ConocoPhillips (COP) explores for, develops, and produces crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids worldwide. Its portfolio includes North American shale and oil sands assets; legacy assets in North America, Europe, Asia, and Australia; various international developments; and exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas. 4 September 2014 Price $79.85 1yr Target $91.54 1yr Cap Gain 14.63% Dividend $2.92 Yield 3.65% 1yr Tot Return 18.28% 1yr DivGR 2.27% 3yr DivGR 7.80% 5yr DivGR 7.50% Payout Ratio 44.99% Beta 1.01 EPS (ttm) $6.49 EPS next yr $6.62 P/E 12.30 PEG 1.85 ROA 7.70% ROE 17.30% | Occidental Petroleum Corp Occidental Petroleum Corporation (OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other. The company was founded in 1920 and is headquartered in Houston, Texas. 4 September 2014 Price $102.37 1yr Target $110.77 1yr Cap Gain 8.20% Dividend $2.88 Yield 2.81% 1yr Tot Return 11.01% 1yr DivGR 18.51% 3yr DivGR 20.08% 5yr DivGR 16.16% Payout Ratio 37.79% Beta 1.51 EPS (ttm) $7.62 EPS next yr $7.45 P/E 13.43 PEG 2.17 ROA 8.70% ROE 14.00% |
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