ConocoPhillips Poised for Dividend Surge Through 2029, Wells Fargo Analysis Shows

In a bullish move, Wells Fargo has upgraded its outlook for ConocoPhillips (COP), forecasting a multi-year runway of dividend growth through the end of the decade. Analyst Sam Margolin points to the company's formidable cash generation and a slate of key catalysts as the drivers behind this optimistic projection.

"ConocoPhillips operates like a precision-engineered dividend machine," Margolin noted in the research report. "With a current yield around 3.3%, its disciplined capital allocation—prioritizing shareholder returns via buybacks and dividends—and a portfolio built for resilience, it's uniquely positioned for compound annual dividend growth."

The analysis identifies several pillars supporting this growth narrative. Foremost is the massive Willow Project in Alaska, slated to commence production in 2029. At peak capacity, Willow is expected to deliver approximately 180,000 barrels of oil per day, serving as a primary engine for a projected $4 billion free cash flow inflection by that year. In a $70-per-barrel oil price environment for 2029, the company is targeting roughly $14 billion in free cash flow.

Further bolstering the outlook is a concerted focus on efficiency. As outlined in recent earnings, ConocoPhillips aims to lower capital and operating costs while maintaining flat to modest production growth. Updated estimates place Willow's total project capital between $8.5 and $9 billion, with total LNG project capital reduced to $3.4 billion. The company reaffirmed its track to deliver an expected $7 billion in incremental free cash flow by 2029, including $1 billion annually from 2026 through 2028.

The commitment to shareholders is already evident in the numbers. In the first half of 2025, the company maintained a 46% payout rate, returning approximately $4.69 billion through buybacks ($2.722 billion) and dividends ($1.968 billion). This trend continued into Q3 with $2.2 billion returned to shareholders. Demonstrating confidence in its cash flow, the board raised the Q4 dividend by 8% to 84 cents per share.

While recent quarterly profits saw a year-over-year dip to $1.7 billion ($1.38 per share) from $2.1 billion, adjusted EPS of $1.61 comfortably beat analyst estimates of $1.41. A 25% surge in production to 2.4 million barrels of oil equivalent per day underscores operational strength. Looking ahead to 2026, capital spending is targeted at $12 billion alongside $10.2 billion in operating costs, as the company advances its major projects.

The broader analyst community remains largely positive. Among 28 analysts covering COP, the consensus skews strongly bullish with 17 "Strong Buy" and 4 "Moderate Buy" ratings, against 6 "Hold" and 1 "Moderate Sell." The mean price target stands at $113.37, with a high target of $132, suggesting substantial upside from the current price near $103.

Market Voices: Investor Reactions

Michael Thorne, Portfolio Manager at Horizon Capital: "This isn't just about a single project. It's about ConocoPhillips' entire capital framework. Their ability to generate massive cash flow in a volatile commodity market and return it predictably to shareholders is a textbook case of disciplined execution. Willow is the future growth lever, but the current engine is already humming."

Sarah Chen, Independent Energy Analyst: "The targets are ambitious, particularly the $14 billion free cash flow projection for 2029. It heavily relies on stable oil prices and flawless execution at Willow, which faces ongoing environmental scrutiny. While the dividend growth story is compelling, it's not without macro and project-specific risks that investors should weigh carefully."

David R. Miller, Retail Investor & Finance Blogger: "Finally, some recognition! For years, 'Big Oil' was told to die off. Now, they're the ones funding the energy transition and paying our retirement dividends. ConocoPhillips is showing how it's done: drill responsibly, print cash, and pay shareholders. This upgrade is long overdue."

Elara Vance, Activist with Climate Forward Fund: "This so-called 'analysis' glorifies a climate-wrecking project in the Arctic. Touting cash flow from Willow is a moral failure, ignoring the planetary cost. Investors chasing these dividends are betting against a livable future. It's short-term greed fueled by long-term devastation."

Disclosure: The author of the original analysis had no positions in the securities mentioned. This information is for educational purposes only.