Global Oil Industry Rebound Leads to Investor Gains
A recent recovery in the global oil market led to a few U.S. oil giants rewarding their investors with dividends. ConocoPhillips (COP, $79.91), a major U.S. player, is setting the trend for others to follow. By boosting its payout three times in less than two years, ConocoPhillips is all set to emerge as a viable income growth option for investors in the space.
Between 2001 to 2012, ConocoPhillips pushed its yield to well above 4%, which was more than double what the S&P 500 offered at that time. However, with the oil supply glut and the subsequent market downturn in 2016, the company aggressively slashed its payout to preserve cash.
Today, with the markets improving with production cuts and increased signs of tighter balance between supply and demand, companies like ConocoPhillips and its peers are making it a priority to reward investors. COP first raised its payout in 2017 by 6%, then further enhanced the payout by 7.5% in early 2018 and another 7% more recently.
As a part of its remodeled strategy, the company adopted both a dividend and stock repurchase program to reward investors. In terms of buybacks, the company also enhanced its original plan to buy back shares worth $3 billion.
