ConocoPhillips announced a nearly 40 percent increase in dividend payouts to investors to help instill confidence in the company on Wall Street amid subdued oil prices and a slowing energy sector.
The Houston oil and gas producer said it will increase its quarterly dividends payments 38 percent, to 42 cents per share from 30.5 cents a share. That's an extra annual cost of about $500 million to the company.
The past 12 months have proven tough on the energy sector and, even with its favored status on Wall Street, ConocoPhillips has suffered as well, seeing its stock value plunge by more than 25 percent over the last year.
To help counteract that downward trajectory, ConocoPhillips is flexing its financial muscle and emphasizing that it will continue to put its shareholders first even in the weaker oil price environment.
In recent years, ConocoPhillips has focused on financial discipline and financial returns, shrinking the company in order to become more efficient and profitable.
"This increase in our ordinary dividend reflects the significant transformation our company has undergone over the past few years," said ConocoPhillips Chief Executive Ryan Lance. "Since announcing our returns-focused value proposition in 2016, we have improved our underlying performance drivers and lowered our sustaining price for the business. Given these enhancements, we are confident we can fund a higher, growing cash dividend."
At the bottom of the last oil bust, ConocoPhillips slice its dividend payouts to 25 cents a share from 74 cents per share. Since then, ConocoPhillips has worked on building it back up again. Monday's announcement represents the company's single-biggest dividend hike in many years.
The company also will keep up a $3 billion annual share repurchase program in 2020 to help boost the stock. In 2018, the company increased the buyback program from $2 billion to $3 billion. And, this year, it even went up to $3.5 billion.
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