Why ConocoPhillips Stock has increased by more than 10% in 2018

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What happened

Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Shares of the largest independent oil and gas exploration company production (E & P) in the United States, ConocoPhillips (NYSE: COP)increased by 13.6% in 2018, according to data provided by S & amp; P Global Market Intelligence. This easily beat the returns of the broader stock market; the S & amp; P 500 decline of 6.2% over the same period. "data-reactid =" 12 "> Shares of the largest independent oil and gas exploration and production (E & P) company in the United States, ConocoPhillips (NYSE: COP), grew by 13.6% in 2018, according to data provided by S & P Global Market Intelligence. This easily beat the returns of the broader stock market; the S & P 500 fell 6.2% over the same period.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Conoco's performance far surpassed its industry's lamentable returns, as measured by SPDR Oil & amp; ETF for exploration and gas production, down 28.6% over the year. All other major United States of America saw their prices fall in double digits during the year. These decreases ranged from Hess'A relatively modest drop of 14.7% to Devon Energy45.6% melting. "data-reactid =" 13 "> Conoco's performances were also superior to those of the industry, in the light of dismal results, SPDR ETF for oil and gas exploration and production, down 28.6% over the year. All other major US E & P saw their prices fall in double digits during the year. These decreases ranged from Hess'A relatively modest drop of 14.7% to Devon Energy45.6% melting.

Oil well in silhouette against a sunset.

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The oil and gas industry has been hit hard by the fall in prices in 2018. Image Source: Getty Images.

So what

What the oil market gives, the oil market can still prevail. That was the lesson of 2018 for E & Ps. The record margins recorded by some drillers over the first three quarters, WTI crude prices exceeding $ 70 per barrel and Brent crude prices exceeding $ 80 on barrel seemed to be decimated in the fourth quarter after the collapse of prices. Brent Crude finished the year at just over $ 50 / barrel, while WTI Crude has only a few nickels above $ 45 / barrel. E & P actions followed.

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Conoco was not at the same time" away from these price fluctuations: In the first half of the year, its shares rose (like all of its European competitors), but in the second half, its shares fell by much less (10.4%) than its nearest counterpart (EOG Resources, data, down 29.9%). "data-reactid =" 28 "> Conoco has not escaped these price swings: in the first half, his shares have increased (like all his peers in E & P), but second half of the year year, its shares fell by much less (10.4%) than its nearest counterpart (EOG Resourcesdown 29.9%).

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "What makes Conoco different from second half of the Biggest is often better, at least in the oil sector, and Conoco is huge, with a market capitalization of $ 76 billion, well above the $ 56 billion of its closest EOG counterpart. United States has between $ 10 billion and $ 25 billion in market capitalization. wider portfolio of assets than his smaller peers. He also had more underperforming assets to sell. And she did a fantastic job of generating cash from these assets and selling assets, which allowed her to repay debt and reward shareholders through buybacks and buybacks. His third quarter eruption proved that it was a constant driver of profitability. These advantages allowed him to mitigate the losses suffered by his sector in the second half of 2018. "data-reactid =" 29 "> What made Conoco different in the second half of the year? Well, bigger is often better, at least in Conoco oil is huge, with a market capitalization of $ 76 billion, well above the $ 56 billion of its closest EOG partner.Most E & Ps in the US are located in the range of $ 10 billion to $ 25 billion market capitalization, it also had underperforming assets to sell and did a fantastic job of generating cash from these assets and selling assets, 39, which used to repay debt and reward its shareholders through buybacks and redemptions, and proved to be a constant driver of profitability, thanks to these benefits that helped mitigate by its sector in the second half of 2018.

Now what

2018 was a good year for the ConocoPhillips stock, particularly in relation to its sector and the wider market. But that does not mean that the company has not taken big chunks. Its stock is still below what it was five years ago, before the start of the sharp drop in oil prices in 2014-2017. And, as I said, it lost value in the fourth quarter of 2018, like everyone else.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But the price of oil seems to have stabilized – for now – and Conoco has a solid plan create value for its shareholders in 2019. If you want to invest in the oil and gas sector, now may be a good time to buy some shares of this shareholder-friendly company at a lower price. "Data-reactid =" 32 "> But oil prices seem to have stabilized – for the moment – and Conoco has a solid plan to create value for its shareholders in 2019. If you're looking to invest in the oil and gas sector, it might be a good thing the time to take shares in this friendly company for shareholders with a discount.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 33 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "John Bromels has no position in the mentioned actions. The Motley Fool has no position in any of the actions mentioned. The Motley Fool has a disclosure policy."data-reactid =" 41 ">John Bromels does not own any of the shares mentioned. The Motley Fool has no position in any of the actions mentioned. Motley Fool has a disclosure policy.