ConocoPhillips (COP) remains my top energy rebound bet for 2018. The energy company recently announced a 7.5 percent increase in its cash dividend, and I continue to see outsize upside potential for ConocoPhillips' free cash flow in a rising oil environment. The U.S. economy is in great shape and oil prices are in an upward trend, which supports the long investment thesis. An investment in ConocoPhillips yields ~2.1 percent, but the yield on cost is likely going to rise.
ConocoPhillips was not exactly an investor favorite during the last energy market downturn. As a matter of fact, ConocoPhillips greatly underperformed other large oil and gas companies such as Exxon Mobil (XOM) and Chevron Corp. (CVX) in 2016 and 2017. The reason: ConocoPhillips spun off its downstream operations into a new publicly traded entity, Phillips 66 (PSX), in 2012.
