Three Life-Changing Investment Lessons From Conoco Phillips

Over at Seeking Alpha, I wrote an article about what I expected to see from Conoco Phillip’s dividend policy over the next five years. My argument in a nutshell was this: Conoco chose to keep its payout ratio at the $2.64 mark after it spun off Phillips 66 to its shareholders, and this effectively amounted to a dividend hike that took the dividend payout ratio from the 30% range to the 45% range. Going forward, Conoco will either have to: give shareholders lower dividend increases for a bit during the good years so its payout ratio can get to a more manageable level, or freeze the dividend during the next downturn in the price of commodities.

After writing that piece, I got into contact with a long-time owner of Conoco stock, who informed that he bought this dean of the dividend university way back in 1983. Over the past … Read the rest of this article!