Analysts Think This Dividend Stock Is Headed for Big Payout Growth Ahead

Core Viewpoint - ConocoPhillips (COP) is recognized as a strong dividend growth company with a yield of 3.31%, generating robust cash flow and focusing on shareholder returns through buybacks and dividends, with potential for multi-year dividend compound annual growth [1][3]. Group 1: Dividend Growth Catalysts - The Willow Project in Alaska is a key catalyst, expected to start in 2029 and deliver approximately 180,000 barrels of oil per day at peak, contributing to $4 billion in free cash flow by 2029 [2]. - The company targets about $14 billion in free cash flow in a $70 oil price environment by 2029, with anticipated growth in free cash flow allowing for increased dividends in the coming years [2]. - The company aims to lower capital and operating costs while achieving flat to modest production growth, with total project capital for Willow updated to $8.5 to $9 billion and total LNG project capital reduced to $3.4 billion [2]. Group 2: Financial Performance - In the first half of 2025, the company had a payout rate of 46%, spending approximately $4.69 billion on buybacks ($2.722 billion) and dividends ($1.968 billion) [2]. - In the third quarter, ConocoPhillips delivered $2.2 billion to shareholders, including $1.3 billion in buybacks and $1 billion in dividends [2]. - For the fourth quarter, the company raised its dividend by 8% to 84 cents per share [2]. Group 3: Project Developments - The company is nearing completion of its capital commitment on the Qatar LNG project, now 80% complete, and is starting new projects, including Qatar LNG and Port Arthur LNG [4]. - The Port Arthur project is expected to generate dividends that will support share buybacks and alleviate the overall dividend burden [4].