Michael Fitzsimmons is a retired electronics engineer and avid investor. He advises investors to construct a well-diversified portfolio built on a core foundation of a high-quality low-cost S&P500 fund. For investors who can tolerate short-term risks, he advises an over-weight position in the technology sector, which he believes is still in the early stages of a long-term secular bull-market. For dividend income, and as a 4th generation oil & gas man, Fitzsimmons suggests investors consider a position in la ...

Core Viewpoint - The energy sector is facing challenges due to macroeconomic uncertainty and commodity price volatility, but some companies are positioned to potentially exceed earnings expectations, which could positively impact their stock prices in the near term [1]. Sector Snapshot - Oil prices have decreased in Q1 2025, with West Texas Intermediate crude averaging $71.84 per barrel, down from $77.56 in Q1 2024, attributed to soft global demand, rising inventories, and increased non-OPEC+ production [2]. - U.S. natural gas prices have rebounded sharply, averaging $4.15 per MMBtu compared to $2.13 a year ago, driven by colder weather and growing LNG exports [2]. Earnings Expectations - S&P 500 energy firms are projected to report a 12.9% year-over-year decline in earnings and a 0.3% dip in revenues, indicating ongoing pressure on profit margins [3][5]. - This decline is an improvement from the 22.4% earnings drop in Q4 2024, but still reflects significant challenges for oil-centric companies [3][6]. Company Performance Insights - Some energy companies are expected to perform better due to effective cost management, operational efficiency, and a focus on natural gas, which may lead to earnings surprises [4][7]. - Energy Transfer (ET) has an Earnings ESP of +9.23% and a Zacks Rank 3, with earnings scheduled for release on May 6 [11][12]. - MPLX LP also has a +9.23% Earnings ESP and a Zacks Rank 3, with earnings set to be released on May 6 [12]. - Pembina Pipeline (PBA) has an Earnings ESP of +2.93% and a Zacks Rank 3, with earnings scheduled for May 8 [13]. - ConocoPhillips (COP) has an Earnings ESP of +2.76% and a Zacks Rank 3, with earnings also scheduled for May 8 [14].

Economic Overview - The U.S. GDP declined at an annualized rate of 0.3% in Q1 2025, disappointing economists who had forecasted a growth of 0.4% [1] - Concerns about a slowdown in the economy are negatively impacting oil and gas stocks, with WTI crude oil prices down 1.4% to approximately $59.50 per barrel and Brent crude also down 1.4% to about $63.30 [2] Stock Performance - ConocoPhillips stock decreased by 2% and Chevron by 2.2%, while Cheniere Energy experienced a more significant drop of 3.6% [3] - The U.S. Energy Information Administration reported a decrease in crude inventories by 2.7 million barrels, which contrasts with a previous report indicating an increase [4] Market Dynamics - The conflicting reports on crude supply are leading investors to focus on the GDP report, assuming that a shrinking economy will reduce oil demand and weaken future prices [5] - Wolfe Research downgraded Cheniere Energy to "peer perform," citing concerns over increased competition in the LNG market, which is contributing to its stock's poor performance [6] Investment Insights - The oil and gas industry is cyclical, characterized by cycles of undersupply and oversupply, necessitating a long-term investment perspective [7] - Among the stocks analyzed, Chevron appears to be the most attractive option, with a total return ratio of just over 1.0, a 4.9% dividend yield, and an expected growth rate of nearly 8% annually over the next five years [8][9] - ConocoPhillips has a lower P/E ratio than Chevron but offers a lower dividend yield of 3.4% and a growth rate of 6% [9] - Cheniere Energy is deemed unattractive, with a high P/E ratio of nearly 17, a low dividend yield of 0.8%, and expected earnings to decline over the next three years [9][10]

An analyst's recommendation downgrade was the event that pushed ConocoPhillips (COP -1.04%) stock down marginally on the second trading day of the week. The incumbent energy company saw its share price dip by slightly over 1% on the day; by contrast, the S&P 500 index landed in positive territory with a 0.6% increase.No longer a bullMoving closer to bear territory in terms of sentiment, Bank of America Securities's Kalei Akamine changed his ConocoPhillips recommendation to neutral from his previous buy. As ...

Group 1 - ConocoPhillips plans to lay off employees as part of cost control measures following its $23 billion acquisition of Marathon Oil [1] - The company is evaluating how to utilize existing resources more effectively and has informed employees about the expected layoffs, which are anticipated to occur in Q4 [1] - ConocoPhillips is the largest independent exploration and production company globally, with 10,300 employees and total assets of $97 billion as of September 30, 2024 [1] Group 2 - ConocoPhillips aims to raise $2 billion by selling non-core assets, including oil and gas properties acquired from Marathon Oil in Oklahoma [3] - Financial data shows ConocoPhillips' total revenue for 2024 is projected at $56.953 billion, a decrease of 2.77% year-over-year, with net income of $9.245 billion, down 15.62% year-over-year [3] - Chevron, another major U.S. oil company, announced layoffs of 15%-20% to reduce costs and streamline operations, with plans to achieve $2 billion to $3 billion in cost reductions by the end of next year [3]

In the energy sector, the fate of almost all the companies is mostly tied to the prices of crude oil and natural gas. However, a billion-dollar question remains: among oil producers and natural gas explorers, which stock is better positioned in today’s business environment? To have a detailed insight, let’s have a comparative analysis of Antero Resources (AR) , a leading natural gas producer, and ConocoPhillips (COP) , whose production is primarily weighted toward oil.Global Focus on Clean-Burning Fossil Fu ...

If you don't buy Conoco stock, which oil stock should you buy instead?Shares of ConocoPhillips (COP 2.89%) dipped on Tuesday after TheFly.com reported multiple bank analysts forecasting lower price targets for the oil major in light of an ongoing trade war and recent declines in oil prices. On Wednesday, however, Conoco stock perked back up, rising a modest 2.3%, and indeed, recovering all of yesterday's losses.And why?Because oil prices are going back up.More oil, less gasAs OilPrice.com reports, oil inven ...

The latest monthly report from OPEC shows that the cartel has revised its global oil demand growth forecast for 2025 downward for the first time since December, now projecting an increase of 1.3 million barrels per day (bpd) — 150,000 bpd less than previous estimates. The revision stems largely from slower-than-expected consumption and new U.S. tariffs that have rattled trade dynamics and economic sentiment globally. As President Trump ramps up tariff measures, including a 125% levy on Chinese imports, inve ...

Oil prices have tumbled this year. WTI, the primary U.S. oil price benchmark, has plunged from about $80 a barrel in early January to around $60 a barrel. The culprit has been the concern that tariffs will slow the global economy, driving down demand for crude oil. Lower crude prices will impact oil company cash flows. However, some oil stocks are in a better position to navigate the lower oil prices than others due to their abundant low-cost oil resources. Three oil companies that can still thrive in the c ...

Core Viewpoint - The energy sector is currently the best-performing stock market sector, with a year-to-date increase of 7.9%, contrasting with a 5.1% decline in the S&P 500, driven by leading oil and gas companies that provide safety amid economic uncertainty and trade tensions [1] Group 1: Company Performance and Cash Flow - ExxonMobil, Chevron, and ConocoPhillips are highlighted as strong dividend stocks due to their ability to generate significant free cash flow (FCF) even at current oil prices [2][3] - ExxonMobil aims to break even at $30 per barrel Brent by 2030 and projects $110 billion in surplus cash through 2030, even if Brent averages $55 per barrel [4] - Chevron expects to generate $5 billion in FCF at $70 Brent in 2025 and $6 billion in 2026, with 75% of its oil investments breaking even below $50 per barrel Brent [5] - ConocoPhillips is investing in long-term projects expected to yield $6 billion in incremental FCF, supported by its acquisition of Marathon Oil [6] Group 2: Capital Return Programs - All three companies are returning substantial amounts to shareholders, with ExxonMobil returning $36 billion in 2024, Chevron over $75 billion between 2022 and 2024, and ConocoPhillips planning to return $10 billion in 2025 [7][8][9] - Despite high yields, these companies spent more on buybacks than dividends in 2024, indicating strong FCF generation and providing a cushion against falling oil prices [10] Group 3: Financial Health and Valuation - ExxonMobil, Chevron, and ConocoPhillips maintain strong balance sheets with debt-to-capital ratios near 10-year lows, allowing them to support operations and capital expenditures with FCF [12][13] - The companies exhibit reasonable valuations with low price-to-earnings and price-to-FCF ratios, suggesting they are good investment values [14] - Valuation metrics are based on trailing-12-month results, and while margins may decrease with lower oil prices in 2025, acquisitions and expansions could still drive earnings and FCF growth [15][16][17] Group 4: Investment Appeal - ExxonMobil, Chevron, and ConocoPhillips are positioned to grow cash flows and return profits to shareholders, offering yields significantly higher than the S&P 500 average of 1.3%, making them attractive for passive income investors [18] - Although energy is not typically viewed as a safe sector, these high-quality companies are considered safe stocks due to their strong balance sheets and manageable payouts [19]