In addition to the cash flow to the investor provided by Conoco Philips' dividends, the stock is likely to outperform a comparable nondividend-paying stock. An investment in Conoco Philips also comes with less risk thanks to its dividend, according to Ben Reynolds for Sure Dividend.
A stock, such as Conoco Philips, that pays a consistent and growing dividend is seen as shareholder-friendly and may be rewarded a higher price in the marketplace. It is also seen as a positive sign regarding the company's profitability and management's confidence in its future prospects, explains Reynolds.
Investors considering an investment in any dividend-paying stock should research the sustainability of the dividend since a cut negates the dividend's benefits. In January 2015, Casey Hoerth for TheStreet raised concerns about the future of Conoco Philips' dividend when a decline in oil prices cut into the company's free cash flow. However, Hoerth notes the company's management stressed the importance of the dividend and is likely not considering any change to current policy until the second half of the year.
As of April 6, 2015, Conoco Philips is paying a quarterly dividend of 73 cents amounting to a yield of 4.56 percent, according to Morningstar. The last increase was in February 2014 when it was raised from 69 cents.