Assessing the Sustainability and Growth of ConocoPhillips's Dividends
ConocoPhillips (COP, Financial) recently announced a dividend of $0.78 per share, payable on 2024-03-01, with the ex-dividend date set for 2024-02-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into ConocoPhillips's dividend performance and assess its sustainability.
What Does ConocoPhillips Do?
ConocoPhillips is a U.S.-based independent exploration and production firm. In 2022, it produced 1.2 million barrels per day of oil and natural gas liquids and 3.1 billion cubic feet per day of natural gas, primarily from Alaska and the Lower 48 in the United States and Norway in Europe and several countries in Asia-Pacific and the Middle East. Proven reserves at year-end 2022 were 6.6 billion barrels of oil equivalent.
A Glimpse at ConocoPhillips's Dividend History
ConocoPhillips has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down ConocoPhillips's Dividend Yield and Growth
As of today, ConocoPhillips currently has a 12-month trailing dividend yield of 2.08% and a 12-month forward dividend yield of 2.24%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, ConocoPhillips's annual dividend growth rate was 32.30%. Extended to a five-year horizon, this rate decreased to 30.00% per year. And over the past decade, ConocoPhillips's annual dividends per share growth rate stands at 2.60%.
Based on ConocoPhillips's dividend yield and five-year growth rate, the 5-year yield on cost of ConocoPhillips stock as of today is approximately 7.72%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, ConocoPhillips's dividend payout ratio is 0.43.
ConocoPhillips's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ConocoPhillips's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. ConocoPhillips's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and ConocoPhillips's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ConocoPhillips's revenue has increased by approximately 38.80% per year on average, a rate that outperforms approximately 88.03% of global competitors.
Next Steps
In conclusion, ConocoPhillips's upcoming dividend payment, consistent dividend history, and robust growth metrics paint an optimistic picture for value investors. The company's ability to maintain a reasonable payout ratio while achieving substantial profitability and growth underscores its potential for continued dividend sustainability and appreciation. With its strong performance in revenue growth and a promising outlook, ConocoPhillips remains an intriguing option for those seeking a balance of income and growth in their investment portfolio.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
