Energy has gone through a tumultuous couple of years, and ConocoPhillips (COP +0.86%) has ridden the wave both downward and upward since 2015. Even with the recovery in crude oil prices over the past several months, ConocoPhillips stock trades well below its best levels in 2014, and those who had hoped that the company would do a stock split back then are increasingly pessimistic about the odds that it will ever get around to splitting its shares again. Yet the oil giant does have a history of doing splits from time to time, and so it's not entirely inconceivable that ConocoPhillips could deliver on the split front eventually. Below, we'll look more closely at the history of ConocoPhillips stock splits to see whether the oil company is likely to make a move in the near future.
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ConocoPhillips stock splits in the past
Here are the dates and split ratios for the stock splits that ConocoPhillips has done in the past:
|
Date of Split |
Split Ratio |
|---|---|
|
Feb. 2, 1920 |
2 for 1 |
|
June 15, 1923 |
2 for 1 |
|
June 19, 1951 |
2 for 1 |
|
June 18, 1956 |
2 for 1 |
|
May 10, 1969 |
2 for 1 |
|
May 7, 1977 |
2 for 1 |
|
May 30, 1985 |
3 for 1 |
|
April 7, 2005 |
2 for 1 |
Data source: ConocoPhillips investor relations. Note: Data before 2002 reflects split history of Phillips Petroleum.
As you can see, stock splits have been a part of ConocoPhillips history going back quite a while, although most of the past splits track along the Phillips Petroleum line of the corporate family tree. Conoco and Phillips merged in 2002, so the most recent split should shed the most light on its behavior in this regard.
When ConocoPhillips has historically done stock splits
Most of ConocoPhillips' stock split history has only limited usefulness in evaluating the stock's likelihood of splitting its shares in the future. In 1985, Phillips Petroleum's three-for-one stock split seemed unusual by today's standards. The stock had climbed to around $55 per share, but in subsequent months, it fell back to below $40 when the split subsequently sent the share price into the low teens. It took three years for the stock price to climb back into the $20s.
However, ConocoPhillips' 2005 stock split looks more typical in the eyes of investors right now. The share price had climbed above the $100 per share mark, topping out just above $110. The two-for-one stock split took the price back into the $50s, and subsequent oil-price strength kept ConocoPhillips' shares moving higher.
Why ConocoPhillips stopped doing stock splits
Yet since then, the oil market has been turbulent enough that ConocoPhillips hasn't had cause to split its shares. During the commodities boom of 2006 and 2007, crude approached $150 per barrel, and ConocoPhillips stock rose above $95 per share in early 2008. Yet the combination of the financial crisis and a big plunge in energy prices cut ConocoPhillips shares by more than half. Even after the worst of the recession was over, the oil company's stock didn't rebound convincingly until 2011.
Most likely, the spinoff of Phillips 66 (PSX +0.64%) was the primary reason why ConocoPhillips hasn't done a stock split since 2005. The move took ConocoPhillips' share price down by about $20 per share, taking away any pressure to split that would have existed in the run-up in crude to triple digit prices again in 2014. Then, the fact that ConocoPhillips was fully exposed to oil price movements as an exploration and production company left the stock more vulnerable to 2015's and 2016's price movements. Those downward impacts have left ConocoPhillips stock where it trades now, around $50 per share.
Will ConocoPhillips ever split again?
Given where the company's share price is now, few investors are talking much about stock splits. But even if ConocoPhillips did have a higher stock price, changing attitudes toward splits might lead it not to do one. In that vein, it's definitely possible that ConocoPhillips might never do a stock split again.
However, what seems more likely is that if oil recovers to triple-digit levels, the resulting price increase for ConocoPhillips stock would eventually drive its management to look more closely at a split. That wouldn't make it a certainty, but it would boost the chances. It could take years, but eventually, the cyclical nature of oil prices should lift ConocoPhillips enough to make a stock split viable again.
