ConocoPhillips (COP) and Laredo Petroleum (LPI) Financial Review

ConocoPhillips (NYSE: COP) and Laredo Petroleum (NYSE:LPI) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ConocoPhillips and Laredo Petroleum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ConocoPhillips 0 6 14 0 2.70
Laredo Petroleum 2 9 6 0 2.24

ConocoPhillips currently has a consensus price target of $58.60, indicating a potential upside of 9.02%. Laredo Petroleum has a consensus price target of $12.97, indicating a potential upside of 51.30%. Given Laredo Petroleum’s higher probable upside, analysts clearly believe Laredo Petroleum is more favorable than ConocoPhillips.

Volatility and Risk

ConocoPhillips has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Dividends

ConocoPhillips pays an annual dividend of $1.14 per share and has a dividend yield of 2.1%. Laredo Petroleum does not pay a dividend. ConocoPhillips pays out -81.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

70.5% of ConocoPhillips shares are owned by institutional investors. 0.8% of ConocoPhillips shares are owned by company insiders. Comparatively, 1.4% of Laredo Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ConocoPhillips and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ConocoPhillips -2.04% 2.78% 1.12%
Laredo Petroleum 66.77% 30.02% 6.46%

Valuation and Earnings

This table compares ConocoPhillips and Laredo Petroleum’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ConocoPhillips $32.58 billion 1.94 -$855.00 million ($1.40) -38.39
Laredo Petroleum $822.16 million 2.53 $548.97 million $2.28 3.76

Laredo Petroleum has lower revenue, but higher earnings than ConocoPhillips. ConocoPhillips is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.

Summary

Laredo Petroleum beats ConocoPhillips on 9 of the 16 factors compared between the two stocks.

ConocoPhillips Company Profile

ConocoPhillips is an independent exploration and production company. The Company explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG) and natural gas liquids. The Company operates through five segments: Alaska, Lower 48, Canada, Europe and North Africa, Asia Pacific and Middle East, and Other International. The Alaska segment explores for, produces, transports and markets crude oil, natural gas liquids, natural gas and LNG. The Lower 48 segment consists of operations located in the United States Lower 48 states and the Gulf of Mexico. Its Canadian operations consists of oil sands developments in the Athabasca Region of northeastern Alberta. The Europe and North Africa segment consists of operations and exploration activities in Norway, the United Kingdom and Libya. The Asia Pacific and Middle East segment has exploration and production operations in China, Indonesia, Malaysia and Australia.

Laredo Petroleum Company Profile

Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.

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