ConocoPhillips As of October 10, 2023 ticker dps (an.) 2024 hike 2023 hike 2022 hike
COP $2.04 0.0% 10.9% 7.0%
Business yield Hike yrs 5 yr CAGR freq. paid since
Oil/Gas Exploration and Production 1.7% 6 14.0% Quarter N/A
ConocoPhillips is expected to pay 8 dividends in 2022.
ConocoPhillips is expected to pay 8 dividends in 2022.

Energy company ConocoPhillips (COP) will start paying quarterly variable dividends to shareholders on top of its regular quarterly dividend of currently $0.46 per share. COP announced several updates that highlight the company’s differentiated value proposition. This announcement follows the recent closing of the company’s acquisition of Shell’s Permian Basin properties on December 1 for net cash of $8.6 billion.

Conoco announced its expected 2022 returns of capital program and the initiation of a three-tier returns of capital framework. The three-tier framework is structured to continue delivering a compelling, growing ordinary dividend and through-cycle share repurchases, now with the addition of a variable return of cash (VROC) tier. The VROC tier will provide another flexible tool for meeting the company’s commitment of returning greater than 30% of CFO during periods when commodity prices are meaningfully higher than the company’s planning price range.

The VROC will be determined and approved each quarter by the board of directors at the same time the ordinary dividend is reviewed. The factors considered in determining the VROC will include the anticipated level of distributions required to meet the company’s capital returns commitment, forward prices, balance sheet cash and total yield. The VROC will be announced at the same time as the ordinary dividend, but the quarterly payout will be staggered from the ordinary dividend payout, resulting in up to eight cash distributions to shareholders throughout the year.

As the company considers the business outlook, including forward commodity prices, it has set its expected 2022 capital returns to shareholders at ~$7 billion. This would represent a ~16% increase in returns of capital versus 2021 and is expected to be allocated roughly equally between cash and share repurchases across the three distribution tiers as follows:

  • The annualized current ordinary dividend, estimated at ~$2.4 billion subject to board review and approval
  • Expected share repurchases of approximately $3.5 billion, including approximately $1 billion funded through remaining Cenovus share sales
  • A VROC of approximately $1 billion subject to board review and approval, anticipated to be distributed ratably on a quarterly basis
The first VROC payment of $0.20 per share by ConocoPhillips is payable on Jan. 14, 2022, to shareholders of record as of Jan. 3, 2022. This variable dividend will yield 0.3% at a stock price of $73 for COP. Expect more of these VROCs in 2022, on top of the regular dividend, standing at $0.46 quarterly right now.
ConocoPhillips (COP) last hiked its quarterly dividend by almost 7 percent to 46 cents per share earlier in 2021. This came after a dividend hike of 2.4 percent to 43 cents per share announced by COP in 2020. In 2018 the energy company hiked its dividend twice. In 2016 COP however cut its dividend by 66.2 percent.

The regular annual ConocoPhillips dividend of $1.84 per share currently yields 2.5% at a stock price of almost $74.

ConocoPhillips is an energy exploration and production company. The Company explores for, produces, transports and markets crude oil, bitumen, natural gas and liquefied natural gas (LNG). The company operates worldwide with business in Alaska, Canada, Europa, North Africa, Asia Pacific and the Middle East.  The Europe, Middle East and North Africa segment consists of operations located in the Norwegian sector of the North Sea; the Norwegian Sea; Qatar; Libya; and commercial and terminalling operations in the United Kingdom. The Other International segment includes exploration activities in Colombia and Argentina. ConocoPhillips has paid a dividend to shareholders every year since at least 1983.