In the third quarter (3Q) of ConocoPhillips' (COP) fiscal year 2013 (FY13), the oil and gas exploration and production (E&P) firm increased its quarterly dividends by 4.5% to $0.69/share, which increased the stock’s dividend yield to 3.76%.
A look at ConocoPhillips' financial metrics shows that, despite a decline in cash flows, the company will likely continue to pay dividends in the future, and we recommend the stock as a must-buy for dividend investors.
IntroductionConocoPhillips is the world’s largest publicly-traded E&P firm in terms of proven reserves and output. In 2012, it separated its downstream business – which included its refining, marketing and transportation businesses – and spun it off as a separate company, Phillips 66 (PSX). The decision to exit the downstream segment came as the company shifted its focus to upstream businesses, which have stronger potential to result in earnings growth provided that commodity prices remain above the costs of production.
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