I own shares of both Conoco and Exxon stock—I expect to be a great income holding over the next ten to fifteen years. But what I do not expect is for the company to give smooth, linear annual increases in their dividend each year. With a company like Coca-Cola, you know what you are getting: a dividend every ninety days that eventually gets raised each February and then the process repeats itself until the next February. That is not what you should expect with upstream oil MLPs and corporations.
Because of the spinoff of Phillips 66 and a series of divestitures thereafter, Conoco Phillips is probably the biggest example of an upstream company that often shows up in defensive and conservative portfolios across the country. Now that Conoco is solely an upstream company, it can be useful to understand the implications of its business model if you want to own … Read the rest of this article!