Better Dividend Stock: ConocoPhillips vs. EOG Resources

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ConocoPhillips is simply a large, low-cost lipid and state producer. It presently needs lipid to mean successful the mid-$40s to make capable currency to money its superior program, which includes 4 large semipermanent enlargement projects. It tin afloat money its dividend with $10 more. Last year, the institution generated $7.3 cardinal of escaped currency travel with lipid successful the mid-$60s, easy covering its $4 cardinal dividend outlay. With crude prices presently overmuch higher, it's generating a upland of excess escaped currency flow. That's enabling ConocoPhillips to further fortify its top-tier equilibrium sheet.

EOG Resources besides has precise low-cost operations. Last year, the U.S. lipid and state elephantine generated $4.7 cardinal successful escaped currency travel aft superior expenditures, easy covering the $2.2 cardinal successful dividends it paid. The institution lone needs lipid to mean astir $50 a tube this twelvemonth to screen its superior spending program and dividend commitment. EOG Resources besides has a pristine equilibrium expanse with a leverage ratio good beneath its target.

ConocoPhillips is investing successful a trio of liquefied earthy state (LNG) projects that should travel online done 2028. These projects, on with cost-savings and margin-enhancement activities, should adhd $1 cardinal to its escaped currency travel each twelvemonth during that period. Meanwhile, ConocoPhillips expects its Willow lipid task successful Alaska to adhd different $4 cardinal successful yearly escaped currency travel erstwhile it starts producing successful 2029. Add it each up, and that's $7 cardinal successful escaped currency travel maturation implicit the adjacent 4 years, assuming lipid averages $70 a barrel. This increasing currency travel volition little the company's breakeven level to the low-$30s by 2029. That robust maturation supports ConocoPhillips' program to turn its dividend wrong the apical 25% of S&P 500 companies.