FORTUNE Playing with fire
Playing with fire PREVIOUS  NEXT
ConocoPhillips

ConocoPhillips
Rank: 75   Ticker: COP   Market value: $108 billion
WHY IT'S HOT: High oil prices. ConocoPhillips is the nation's second-largest refiner and third-largest American oil company overall (behind ExxonMobil and Chevron).

CHALLENGES AND OPPORTUNITIES: Almost 80 percent of Conoco's oil and gas reserves are in mature regions in North America and Europe, so CEO Jim Mulva needs to push into more resource-rich regions, such as Russia and the Middle East. This year, Mulva is spending $18 billion to finance new drilling projects, upgrade investment-starved refineries and make acquisitions, including increasing Conoco's stake in Russian oil producer Lukoil. But this can be risky - witness the charge Conoco had to take when Venezuela unexpectedly slapped higher taxes on foreign oil companies. And growing by acquisition is getting pricey. Critics say Mulva overpaid when he bought energy giant Burlington Resources last year for $35 billion, a deal that added $19 billion in debt.

STOCK OUTLOOK: With a price-earnings ratio of six (based on the previous 12 months' earnings), the stock sells at a significant discount to its peers. The gap stems in part from Mulva's willingness to embrace risky exploration projects. But so far Mulva's bets have paid off, making Conoco shares look awfully attractive.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.