ConocoPhillips (COP)

COP-N vs. CVX-N. He prefers COP-N. It has underperformed. It is more in the E&P space and did some divestitures recently. They are in a great spot. There is nothing wrong with CVX-N but it will underperform.

2016 was the year management would like to forget. They were caught with their pants down when oil prices collapsed in Jan/Feb 2016, to the point where they had to cut their dividend. They went back to the drawing board. Had an analyst’s day at the end of 2016, where they said they were going to sell $5-$8 billion of assets in 2017. They sold over $13 billion of assets already, and have used that to repair the balance sheet. They’re buying back stock. Thinks they are positioning the company in a position of strength in an environment in the energy sector, which is going to continue to be volatile. Dividend yield of 2.1%. (Analysts’ price target is $53.)

He is not fond of energy. Sometimes you can have a good company, but a bad stock. Let the stock bottom and see how the chart forms. Don’t try to pick a bottom.

Dividend is sustainable. They have up and downstream operations. He would be concerned about commodity prices affecting it.

If you are going to look at a US major, this is probably “the one” to own. Has really good growth right now.

One of the majors. It is one of the oil stocks he would feel relatively okay owning because it is well capitalized and also has refining operations. However he basically does not want to be in the area.

Her clients have done well in energy, because of the types of names they own in this environment. As crazy as it sounds, the fall in energy prices does have a silver lining. One of the more frustrating things in a market is when you have a lot of capital chasing returns that don’t make any sense. Their ROC over time has been very strong. She thinks this will give good returns over time.

Stock vs. Stock. BP-N vs. COP-N. COP-N has outperformed BP-N, but that is history. You have to know the management, their business plan, and he does not know that. COP-N is probably not relatively cheap.