COP - ConocoPhillips: About That Extra Mile

2024-04-24 05:21:44 ET

Summary

• ConocoPhillips guides to shareholder returns of $9 billion.
• Emphasizing cash returns can limit growth opportunities and compounding effects for investors.
• Cash flow from operating activities declined to $20 billion in fiscal year 2023, with $11 billion in capital expenditures.
• Free cash flow calculations are non-GAAP and can vary from company to company.  Investors must therefore make sure they have an "apples to apples" comparison.
• Diamondback Energy has an acquisition strategy that adds growth to the shareholder return model. This should lead to superior long-term returns.

ConocoPhillips ( COP ) recently guided to shareholder returns of $9 billion. Management also stated during the fourth quarter conference call that the figure was a starting point as it would be dependent on commodity prices and the effects of those prices on the business. ConocoPhillips management has long emphasized shareholder returns. That strategy is fine as far as it goes. But there are others out there that also manage to grow in different ways while having the same shareholder emphasis....

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