1 Magnificent Oil Stock Down 18% to Buy and Hold Forever

Core Insights - ConocoPhillips shares have declined nearly 18% over the past year, contrasting with a 15% rise in the S&P 500, primarily due to a slump in oil prices, with Brent crude falling over 15% to around $60 per barrel [1][2] Company Performance - Despite low oil prices, ConocoPhillips is positioned to thrive, with multiple growth catalysts expected to significantly enhance free cash flow by the end of the decade [2] - The company has built a high-quality resource portfolio through strategic acquisitions, including a $22.5 billion purchase of Marathon Oil, resulting in a diverse and durable portfolio with a supply cost below $40 per barrel [4][6] - ConocoPhillips anticipates generating approximately $7 billion in free cash flow this year after capital expenditures, allowing for substantial returns to shareholders through dividends and share repurchases [5] Financial Strength - The company maintains a strong balance sheet, ending Q2 with $5.7 billion in cash and short-term investments, plus $1.1 billion in long-term investments, providing a buffer for continued investment and shareholder returns during low oil price periods [6] - ConocoPhillips is actively selling non-core assets to strengthen its balance sheet, including a $1.3 billion sale of Anadarko Basin assets and plans for an additional $2.5 billion in sales by the end of next year [6] Growth Outlook - The company is entering a multi-year growth cycle in free cash flow, driven by the successful integration of the Marathon Oil acquisition, which is expected to yield $1 billion in synergies by year-end, surpassing initial estimates of $500 million [7] - ConocoPhillips projects an additional $1 billion in cost and margin enhancements related to the acquisition by the end of next year, contributing to free cash flow growth without requiring an increase in crude oil prices [7][8] - The company expects to achieve $7 billion in incremental annual free cash flow by 2029, enhancing its capacity to return capital to shareholders [8]