Updated 3/6/25
ConocoPhillips (NYSE: COP) is a major player in the oil and gas industry, focusing on exploration and production across North America, Europe, Asia, and Australia. Unlike integrated energy giants, COP doesn’t have downstream refining operations, making its business model more directly tied to crude oil and natural gas prices.
For income-focused investors, ConocoPhillips offers an interesting mix of dividend yield and financial strength. The company has a long history of rewarding shareholders, but given the volatility in the energy market, it’s always worth taking a closer look at how sustainable those payouts are. Let’s dive into the numbers and assess its dividend potential.
Key Dividend Metrics
📌 Forward Dividend Yield: 3.52%
📌 Annual Dividend per Share: $3.12
📌 5-Year Average Dividend Yield: 2.70%
📌 Payout Ratio: 39.95%
📌 Dividend Growth Streak: 6 years
📌 Ex-Dividend Date: February 14, 2025
📌 Dividend Payment Date: March 3, 2025
Dividend Overview
Right now, ConocoPhillips offers a dividend yield of 3.52%, which is higher than its five-year average of 2.70%. That tells us two things—either the dividend has been growing, or the stock has been under pressure, boosting the yield. In this case, it’s likely a mix of both.
A payout ratio of just under 40% suggests that the company is being fairly conservative with its dividend, leaving plenty of room for reinvestment and financial flexibility. That’s important in an industry where cash flow can swing wildly with oil prices.
Dividend Growth and Safety
One of the most important factors for dividend investors is reliability. ConocoPhillips has been increasing its payout in recent years, making it a solid pick for those looking for dividend growth.
However, it’s worth remembering that ConocoPhillips has had to adjust its dividend in the past when oil prices crashed. Unlike oil majors that have refining businesses to smooth out earnings, COP is more vulnerable to commodity price swings. That said, the company has done a good job of maintaining a balanced payout strategy, ensuring that dividends don’t get too high when oil prices are strong—this helps protect against potential cuts in weaker years.
With a payout ratio of 39.95%, there’s a reasonable cushion even if the market takes a downturn. While this isn’t the highest yield in the sector, it’s a sustainable one.
Chart Analysis
Trend Overview
The chart for ConocoPhillips (COP) shows a clear downtrend over the past year. After peaking in the first half of the chart, the stock has consistently moved lower, with a series of lower highs and lower lows. The price is currently sitting near its lowest levels in the timeframe shown, indicating ongoing selling pressure.
Moving Averages
The 50-day moving average (orange line) has been trending downward and remains below the 200-day moving average (blue line), forming a classic death cross pattern that signals long-term bearish momentum. Throughout the chart, the 50-day moving average has acted as a resistance level, with multiple failed attempts by the stock to break above it. The 200-day moving average is also sloping downward, confirming the overall negative trend.
Recent Price Action
The last few candles suggest a steep drop, with the most recent closing price at $88.60. This sharp decline brings the stock to a level not seen for an extended period, meaning there could be a mix of panic selling and stop losses being triggered. The last five candles indicate persistent selling pressure, with little sign of a meaningful rebound.
Volume Analysis
Volume has picked up noticeably during recent declines, suggesting that the sell-off is accompanied by strong participation from traders. Higher volume on down days generally reflects institutional selling rather than just retail investors exiting positions. Earlier in the chart, volume spikes were seen on sharp declines, reinforcing that major market players have been reducing exposure to the stock.
Relative Strength Index (RSI)
The RSI indicator in the lower section of the chart shows a reading near 52.99, which is in the neutral zone. Despite the stock’s sharp decline, RSI has not yet reached oversold territory (below 30), meaning there could still be more downside room before a technical bounce. However, it’s important to watch if RSI continues declining, as a break below 30 could signal extreme selling pressure and a potential short-term reversal.
Analyst Ratings
📊 ConocoPhillips (COP) has recently seen a mix of upgrades and downgrades from analysts, reflecting both optimism and caution in the energy sector. The latest consensus 12-month price target sits at approximately $133.47, signaling potential upside from current levels.
🔼 Upgrades
📈 Mizuho Securities – On December 16, 2024, Mizuho upgraded COP from ‘Neutral’ to ‘Outperform’ and raised the price target from $132 to $134. The firm cited strong operational efficiency and favorable positioning within the oil and gas industry as key reasons for the upgrade. Analysts also pointed to the company’s ability to maintain steady cash flow despite recent market volatility.
📈 JPMorgan – On December 5, 2024, JPMorgan raised its rating from ‘Neutral’ to ‘Overweight’ and adjusted the price target to $123 from $120. The decision was driven by a better-than-expected earnings report and stronger free cash flow projections, which indicated a more resilient financial position than previously anticipated.
🔽 Downgrades
📉 Raymond James – On February 10, 2025, Raymond James downgraded COP from ‘Strong Buy’ to ‘Outperform’ while cutting the price target from $157 to $124. The downgrade was largely due to concerns over potential headwinds in the energy market, including declining crude oil prices and shifting global demand dynamics.
📉 BMO Capital – On March 5, 2025, BMO Capital revised its price target from $120 to $117 while maintaining an ‘Outperform’ rating. The adjustment reflected a more cautious outlook on near-term commodity price movements, which could impact revenue forecasts for ConocoPhillips in the coming quarters.
💡 Analysts remain divided on the stock, balancing its strong financial health and operational efficiency against uncertainties in the broader energy market.
Earnings Report Summary
ConocoPhillips recently released its fourth-quarter and full-year 2024 financial results, and while there were some solid highlights, the numbers also reflected a few challenges. The energy sector has been dealing with fluctuating prices and shifting demand, and the company’s results show both resilience and the impact of those market conditions.
Fourth-Quarter Performance
For the last quarter of 2024, ConocoPhillips posted earnings of 2.3 billion, which works out to 1.90 per share. That’s down from the 3 billion they brought in during the same quarter last year. Adjusted earnings, which strip out any one-time items, came in slightly higher at 2.4 billion, or 1.98 per share, but still below last year’s 2.9 billion, or 2.40 per share.
Production for the quarter averaged 1.308 million barrels of oil equivalent per day, which represents a slight increase year-over-year. Even with the fluctuations in oil and gas prices, ConocoPhillips has managed to keep production levels strong, which is a positive sign.
Full-Year 2024 Highlights
Looking at the full year, the company reported total earnings of 9.2 billion, or 7.81 per share, compared to 11 billion, or 9.06 per share, in 2023. The drop is mostly due to softer energy prices in certain quarters.
One standout number is the reserve replacement ratio, which came in at 244 percent. That essentially means the company replaced more than double the amount of reserves it produced, setting itself up for continued production growth. The total estimated reserves now sit at around 7.8 billion barrels of oil equivalent.
Strategic Moves
One of the biggest developments for ConocoPhillips last year was its 17.1 billion acquisition of Marathon Oil. This deal brings in high-quality assets and is expected to generate more than 1 billion in cost savings by the end of 2025.
On the other side of things, the company is also looking to sell some non-core assets, including parts of its Permian Basin holdings, with plans to raise around 600 million through divestitures. This strategy helps streamline operations and refocus on higher-value projects.
Investors got a solid return last year, with 9.1 billion going back to shareholders through dividends and buybacks. For 2025, the company has set an ambitious goal to return 10 billion, with 4 billion earmarked for dividends and 6 billion for stock repurchases.
Speaking of dividends, the company just announced a quarterly payout of 78 cents per share, payable on March 3 to investors who held shares as of February 17.
Looking ahead, ConocoPhillips expects production in 2025 to land somewhere between 2.34 million and 2.38 million barrels of oil equivalent per day, with planned capital expenditures of 12.9 billion. These projections suggest the company is staying aggressive in its growth strategy while maintaining financial discipline.
Overall, while earnings dipped a bit from the previous year, the company remains focused on strengthening its portfolio, returning cash to shareholders, and navigating the ups and downs of the energy market with a steady hand.
Financial Health and Stability
Balance Sheet Strength
- Total Cash: $6.11 billion
- Total Debt: $25.35 billion
- Debt/Equity Ratio: 39.12%
- Current Ratio: 1.29
Debt is always a concern for dividend investors, especially in capital-intensive industries like energy. ConocoPhillips has a moderate level of debt, but it isn’t overleveraged. A debt-to-equity ratio of 39.12% is reasonable and suggests that the company isn’t taking on excessive risk.
It also has over $6 billion in cash, giving it the ability to manage any short-term turbulence. That’s reassuring when considering long-term dividend sustainability.
Cash Flow Strength
- Operating Cash Flow: $20.12 billion
- Levered Free Cash Flow: $6.67 billion
Strong cash flow is the foundation of a reliable dividend. ConocoPhillips generates more than enough operating cash flow to cover dividends and reinvest in its business. The company’s ability to generate free cash flow even in challenging market conditions makes it a more dependable dividend stock.
Valuation and Stock Performance
Stock Price Performance
- Current Price: $90.34
- 52-Week Range: $86.81 – $135.18
- 50-Day Moving Average: $99.34
- 200-Day Moving Average: $107.14
COP has had a rough year, down over 21% from its 52-week high. This decline has pushed the dividend yield higher, making the stock look more attractive for income investors. However, the price is also trading below both its 50-day and 200-day moving averages, which suggests some near-term weakness.
Valuation Metrics
- Trailing P/E: 11.34
- Forward P/E: 9.98
- Price/Sales: 1.91
- Price/Book: 1.74
Looking at these numbers, the stock appears undervalued. A forward P/E of 9.98 indicates that the market isn’t pricing in much growth, and a price-to-book ratio of 1.74 suggests the stock is trading close to its asset value. Historically, energy stocks tend to trade at lower valuations when oil prices are expected to be weak, so this could be a sign that the market is being cautious about the near-term outlook for crude oil.
Risks and Considerations
- Oil Price Volatility – Since COP is focused on exploration and production, its earnings are highly dependent on oil prices. A prolonged slump in crude could impact both the stock price and dividend payouts.
- Geopolitical Uncertainty – The energy market is heavily influenced by global events, including OPEC+ decisions, tensions in the Middle East, and changes in government policies.
- Regulatory and ESG Pressures – The push toward cleaner energy could impact long-term demand for oil and gas, creating potential headwinds for traditional energy companies.
- Stock Performance Trends – COP has been under pressure lately, with its price sitting below key moving averages. Investors should watch for signs of stabilization before expecting a strong rebound.
Final Thoughts
For income-focused investors, ConocoPhillips offers a compelling mix of dividend yield, financial strength, and growth potential. With a 3.52% yield and a conservative payout ratio, it provides a steady income stream while maintaining enough flexibility to weather market volatility.
The company’s financials are solid, and its strong cash flow supports continued shareholder returns. However, the stock is not without risks—its performance is closely tied to oil prices, and it lacks the refining operations that help buffer some of the industry’s downturns.
For those comfortable with the ups and downs of the energy sector, ConocoPhillips is an appealing option. It offers a balance of income and growth potential, but investors should be mindful of the external factors that could impact its long-term performance.
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