ConocoPhillips: A High-Growth Dividend Stock to Buy Now With $1,000

Dividend-paying stocks have proven to be powerful engines for long-term wealth creation. Research from Ned Davis Research and Hartford Funds reveals that over the past 50 years, companies in the S&P 500 that consistently grew their dividends delivered an annualized total return of 10.2% — significantly outperforming non-dividend-paying stocks (4.3%) and those with flat dividend policies (6.8%). Against this backdrop, identifying the right dividend stocks to buy now becomes crucial for income-focused investors.

Among today’s most compelling opportunities is ConocoPhillips (NYSE: COP), an energy sector giant that has set its sights on joining the top quartile of S&P 500 dividend growers. With a current dividend yield of 3.3% — nearly three times the broader market’s 1.1% yield — the company offers an attractive entry point for investors deploying $1,000. At this investment level, you’d generate over $33 in annual dividend income right from the start.

Why Dividend Growth Outpaces Market Returns

The mathematics of dividend growth are compelling. When a company commits to raising its payout year after year, it compounds wealth in two ways: through the growing income stream and through potential stock price appreciation that often accompanies such consistent capital returns. The S&P 500’s five-year compound annual dividend growth rate of 5% sets the benchmark, but the best dividend growers significantly surpass this.

ConocoPhillips exemplifies this model. The company’s strategic focus on dividend expansion creates a dual benefit for shareholders: immediate income through a high yield, coupled with the prospect of accelerating payouts over time.

A Proven Track Record in Dividend Expansion

ConocoPhillips has demonstrated commitment to rewarding shareholders over the past decade. The company has increased its base dividend payment annually for ten consecutive years — a testament to consistent capital discipline and operational success. Recent years have been particularly generous for shareholders, with dividend raises of 14% in 2023, 34% in 2024, and 8% in 2025.

Beyond ordinary dividend increases, the company also implemented variable dividend payments in prior years, which it formalized as permanent increases during the substantial 2024 boost. This evolution shows management confidence in the company’s ability to sustain elevated payout levels. Looking ahead, the company has explicitly committed to maintaining dividend growth within the top 25% of S&P 500 companies — a challenging but achievable target given recent track record.

Financial Strength Supporting Future Growth

The foundation for ConocoPhillips’ dividend expansion rests on robust financial capacity. The oil company operates a portfolio of low-cost oil and gas resources that generate substantial free cash flow across various commodity price scenarios.

Current economics are favorable. At average oil prices around the mid-$40s per barrel, ConocoPhillips generates sufficient cash to cover capital expenditures. When factoring in dividend obligations, the company requires oil averaging roughly $50 per barrel. With crude trading in the $60s range currently, the company generates meaningful excess free cash flow — capital the company reinvests through share repurchases and future growth initiatives.

The financial picture improves substantially in coming years. Several major projects—including liquefied natural gas (LNG) developments and the Willow Oil project in Alaska—represent the company’s current capital priorities. These investments are projected to add approximately $6 billion in incremental annual free cash flow by 2029, assuming average oil prices near $60 per barrel. This would represent meaningful growth from the $6.1 billion in free cash flow generated through the first nine months of 2025.

This expanded cash generation capability will further reduce the company’s breakeven level to the low $30s by 2029 — a transformational shift that dramatically increases financial resilience and the capacity to increase dividends across various commodity price scenarios.

Combining Yield With Growth Potential

ConocoPhillips presents a rare combination: an above-average current dividend yield paired with expectations for above-market dividend growth rates. This income-plus-growth profile positions the company to deliver robust total returns that benefit both income-seeking and growth-oriented investors.

The combination of starting yield above the market average and management’s commitment to top-quartile dividend growth creates a compelling foundation for long-term wealth accumulation. For investors seeking high-quality stocks to buy now, this profile deserves consideration as part of a diversified portfolio strategy.

The Bottom Line

ConocoPhillips offers income investors a distinctive opportunity: a stock generating substantial current returns while maintaining clear visibility into future dividend increases. The combination of financial strength, proven management execution, and strategic investments in large-scale projects creates a compelling case for investors evaluating which stocks to buy now with capital to deploy.

Before making any investment decision, review all available research and consider how ConocoPhillips fits within your broader financial goals and risk tolerance. The company’s dividend growth trajectory and financial capacity suggest it warrants evaluation among premium dividend stocks to buy now in today’s investment landscape.