These Oil Stocks Are Delivering High-Octane Dividend Growth

Core Insights - Companies that pay dividends have significantly outperformed non-payers over the last 50 years, with an average annual total return of 9.2% compared to 4.3% for non-payers, and dividend growers achieving 10.2% [1] Company Summaries ConocoPhillips - ConocoPhillips recently increased its quarterly dividend by 34%, continuing a trend of high dividend growth, with increases of 14% in 2023 and 11% in 2022 [3] - The company aims to be in the top 25% of dividend growth stocks in the S&P 500, supported by accretive acquisitions, high-return capital projects, and share repurchases [3][4] - ConocoPhillips is closing a $22.5 billion acquisition of Marathon Oil, expected to enhance cash flow per share and generate over $500 million in annual cost savings [4] Diamondback Energy - Diamondback Energy has achieved an industry-leading average quarterly compound annual growth rate of 8% for its base dividend since 2018, with a total increase of 620% during this period [5] - The company recently completed its largest acquisition, purchasing Endeavor Energy Resources for $26 billion, which is expected to add 10% to its free cash flow per share next year [6] - Diamondback plans to return at least 50% of its growing free cash flow to shareholders through dividends and share repurchases, while using the remaining 50% to strengthen its balance sheet [6] EOG Resources - EOG Resources has raised its regular dividend by 7%, maintaining a sustainable dividend growth for 27 years, with a nearly 22% compound annual growth rate over the past decade [7][8] - The company focuses on organic growth rather than costly acquisitions, discovering low-cost, high-return oil and gas resources across the U.S. [8] - EOG Resources plans to return more than 100% of its annual free cash flow to shareholders through share repurchases and special dividends, supported by a strong balance sheet [10] Investment Potential - ConocoPhillips, Diamondback Energy, and EOG Resources are positioned for continued high-octane dividend growth, making them attractive options for investors seeking income growth and strong total return potential [11]