Market Overview - The S&P 500 index has experienced a decline after peaking on February 19, 2025, despite a 1.2% increase in the first two months of the year [1] Energy Sector Insights - Energy prices have decreased over the past year, with West Texas Intermediate crude oil down 14.3%, presenting an opportunity for investors to consider energy stocks [2] - The current market conditions are favorable for patient investors seeking passive income through energy stocks [2] Company Analysis: Occidental Petroleum - Occidental Petroleum's stock has declined by 22.7%, yet the company achieved a record in U.S. oil production in 2024, bolstered by strong performance in various basins [4][5] - The company has improved its financial position by repaying 4.5billioninnear−termdebtaheadofschedule[5]−Withastrongerbalancesheetandportfolio,OccidentalPetroleumiswell−positionedtonavigatethedownturninenergyprices[6]CompanyAnalysis:ConocoPhillips−ConocoPhillipshasseenastockdeclineof19.222.5 billion acquisition of Marathon Oil, adding over 2 billion barrels of low-cost resources and expected synergies exceeding 1billionin2025[8]−ConocoPhillipsincreaseditsreservesto7.8billionbarrelsofoilequivalent(BOE)bytheendof2024,upfrom6.8billionBOEin2023[9]−Thecompanymaintainsaconservativeapproachtoshareholderreturns,committingtoreturnatleast303 billion in free cash flow in 2024, allowing for 2billioninshareholderreturnsand472 million in debt repayment [13] - Devon Energy has shifted focus towards share buybacks rather than substantial variable dividends, while still planning to return up to 70% of free cash flow to shareholders in the future [14][15] Investment Strategy - The decline in energy prices presents a cyclical opportunity for investors to acquire leading energy stocks at discounted prices [16] - Conservative investors may consider Occidental Petroleum and ConocoPhillips, while those seeking growth potential should look at Devon Energy [17]
ConocoPhillips(COP) The Motley Fool·2025-03-13 12:30