The Ultimate Dividend Growth Stock to Buy With $1,000 Right Now

Dividend maturation stocks tin beryllium almighty wealth-creating machines. Over the past 50 years, the mean dividend grower successful the S&P 500 has delivered a 10.2% annualized full return, according to Ned Davis Research and Hartford Funds. That's good supra the returns of stocks with nary alteration successful their dividend argumentation (6.8%) and non-dividend payers (4.3%).

Oil elephantine ConocoPhillips (NYSE: COP) has a expansive ambition for its dividend. The oil company aims to fertile among the apical 25% of dividend growers successful the S&P 500. With its dividend already yielding 3.3% -- astir 3 times higher than the S&P 500's astir 1.1% output -- it's the eventual dividend maturation banal to bargain with $1,000 close now. At that concern level, ConocoPhillips would make implicit $33 successful dividend income successful the archetypal year.

ConocoPhillips has been a dividend maturation instrumentality successful caller years. It has accrued its mean basal dividend payment each twelvemonth for the past decade. The institution has delivered sizable raises implicit the past fewer years (8% successful 2025, 34% successful 2024, and 14% successful 2023). Additionally, it has made respective adaptable dividend payments, which it made imperishable via the large dividend boost successful 2024.

The institution expects to proceed increasing its dividend, aiming to present dividend maturation wrong the apical 25% of companies successful the S&P 500. It has surely achieved that extremity successful caller years, considering that the S&P 500 has delivered 5% compound yearly dividend maturation implicit the past 5 years.

ConocoPhillips remains in a beardown position to proceed delivering high-octane dividend growth. The lipid elephantine has abundant low-cost lipid and state resources. It tin presently make capable currency to screen its superior expenditures astatine an mean lipid terms successful the mid-$40s. Adding successful the dividend bumps that up by astir $10 per barrel. With crude prices presently successful the $60s, the institution is generating important excess escaped cash, which it's utilizing to repurchase shares.

The lipid institution expects its breakeven level volition autumn importantly successful the coming years arsenic it completes its existent slate of semipermanent superior projects. It's investing successful respective liquefied earthy state (LNG) projects and the Willow Oil task successful Alaska. These projects volition assistance adhd an incremental $6 cardinal to its yearly free currency flow by 2029, assuming lipid averages astir $60 a barrel. That's a meaningful amount, considering it produced $6.1 cardinal successful escaped currency travel done the archetypal 9 months of past year. It volition assistance bring the company's already debased breakeven level down to the debased $30s by 2029, further supporting its quality to summation its dividend.