ConocoPhillips Just Raised Its Dividend 11%. Is It a Better Buy Than Murphy Oil?
Two oil producers just posted strong quarters, but only one turned its cash flow into a payout that can survive a price slump. For income investors, the gap between a bigger yield and a safer check may surprise you.
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ConocoPhillips (NYSE:COP | COP Price Prediction) just raised its quarterly dividend 11% to $0.93. Murphy Oil (NYSE:MUR) followed with a Q3 report that beat estimates on higher production. Brent averaged $97.00/bbl during the quarter, which helped both. Retirees must ask which payout holds up once oil cools off.
Permian Efficiency Funds Conoco’s Raise While Murphy’s Capex Eats Its Cash
Conoco’s Lower 48 assets drove the quarter. Permian pump hours rose 15% from 2025, and capex fell 52.99% year over year. Together they pushed free cash flow to $4.039 billion. That cash paid for $2.4 billion in buybacks and $1 billion in dividends, so the payout took only a small share.
Murphy’s operations beat expectations. Production reached 186,500 BOEPD, above guidance, and adjusted EPS of $1.08 topped the $0.86 consensus. Cash flow fell behind. Capex jumped 171.46% after Eagle Ford drilling resumed, which left free cash flow at $48.2 million against $50 million in dividends. That leaves almost no margin for an income stock.
| Dividend Lens | ConocoPhillips | Murphy Oil |
|---|---|---|
| Quarterly dividend | $0.93 | $0.35 |
| Forward yield | 2.8% | 3.9% |
| Q3 free cash flow | $4.039B | $48.2M |
| Return framework | 45% of CFO | At least 50% of adjusted FCF |
One Lowers Its Breakeven. One Keeps Drilling for the Next Hub.
Conoco is built for durability. Management puts its pre-dividend breakeven in the mid-40s WTI and expects it to approach the low 30s as Willow starts up in early 2029. CFO Connie Haynes-Welsh said, “Buybacks are also how we flex with price.” In practice, repurchases take the hit from oil swings and the dividend stays protected.
Murphy is spending to grow. Lac Da Vang in Vietnam reached first oil on Sept. 27. Management expects Lac Da Vang and Chinook together to generate about $1 billion over five years at $80 Brent. Côte d’Ivoire appraisal could cost another $300 million to $400 million, and CEO Eric Hambly admitted, “I do not know if we will do that.”
Murphy’s January Budget Is the Next Dividend Test
Murphy’s 2027 budget, due in late January, is worth watching. Eagle Ford capital is set to rise to around $500 million, and that comes before any Bubale wells. Conoco expects modestly lower 2027 capital, which gives its dividend a calmer track.
Why ConocoPhillips’ Payout Looks Sturdier for Retirement Income
ConocoPhillips shows a stronger dividend profile. Its yield is lower than Murphy’s, but an A-rated balance sheet and net debt at 0.5 times CFO make the payout much stronger. Murphy cut its quarterly dividend to $0.125 in 2020, and that history matters when oil falls (we highlighted seven warning signs that a big yield is about to be cut in a free report here: Dividend Traps).
Murphy offers a higher yield coupled with exploration risk and potential upside in Côte d’Ivoire. Conoco’s profile lines up more closely with reliable quarterly income.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
