Does ConocoPhillips Have the Balance Sheet to Handle Market Volatility?

ConocoPhillips COP is a leading exploration and production company and is highly exposed to oil and natural gas price volatility. However, unlike many upstream players, COP has the balance sheet strength to withstand unfavorable business scenarios. Thus, despite being vulnerable to extreme volatility in commodity prices, due to lower financial stress, the energy major is capable of continuing operations during periods of low oil prices.The debt-to-capitalization of COP is 26.7%, much lower than the industry’s 49.8%. Thus, compared to composite stocks belonging to the industry, the company has significantly lower exposure to debt capital. By the end of the first quarter of 2025, COP had $7.5 billion in cash and short-term investments. On top of it, the oil and gas producer had $1 billion in long-term liquid investments, reflecting strong liquidity.The company highlighted its balance sheet as A-rated and hence can get access to debt capital in favorable terms even during periods when the business environment becomes challenging. Thus, having presence in some of the prolific shale plays in the United States, along with a healthy balance sheet, ConocoPhillips will likely continue to generate handsome cash flows for shareholders.XOM & CVX Also Have Healthy Balance SheetsLike COP, Exxon Mobil Corporation XOM and Chevron Corporation CVX also have lower debt exposure.The debt-to-capitalization of ExxonMobil is 12.2%, while CVX’s is 16.5%. Thus, despite having significant exposure to exploration and production activities, both XOM and Chevron can lean on their balance sheet to combat periods of low oil prices.COP’s Price Performance, Valuation & EstimatesShares of COP have plunged 10.7% over the past year compared with the 18.7% decline of the industry. Image Source: Zacks Investment ResearchFrom a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.31X. This is below the broader industry average of 10.89X. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for COP’s 2025 earnings has been revised upward over the past seven days. Image Source: Zacks Investment ResearchCOP stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report ConocoPhillips (COP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks