ExxonMobil (XOM 0.15%) is one of the world's top dividend payers. Its $14.9 billion ranked third worldwide in dividend payments last year, only trailing tech giants Microsoft and Apple. The big oil company could pay even more in dividends this year. It's off to a great start, doling out $3.8 billion in dividends during the first quarter.

The dividend is one of ExxonMobil's top priorities. The company's management team discussed on its recent first-quarter earnings conference call how it views the payout. The team highlighted three things investors need to know about the company's dividend.

Exxon's consistent capital allocation approach

On the call, Exxon's CFO, Kathy Mikells, noted that Exxon continues to have a very consistent approach to capital allocation: "First and foremost, we want to make sure we are making investments in this business that ultimately drive the long-term earnings and cash flow growth that create the virtual cycle of us being able to enhance shareholder returns and return cash to shareholders via dividends as well as a more consistent share repurchase program. That is job No. 1."

As the CFO noted, Exxon's top priority is to invest capital into its business to drive earnings and cash flow growth over the long term. That strategy has paid dividends for the oil giant over the years and should continue doing so in the future. Exxon's current corporate plan aims to double its earnings capacity by 2027 from 2019's baseline for earnings and commodity prices. It's focusing its investments on its advantaged assets (i.e., low cost of supply and high returns), with the bulk going toward Guyana, Permian Basin, Brazil, and LNG.

Exxon's growing earnings and cash flow enable it to return more money to shareholders in dividends and buybacks. It returned a peer-leading $32.4 billion last year, including $14.9 billion in dividends and $17.4 billion in share repurchases. The company has consistently increased its dividend for a peer-leading 41 straight years. Meanwhile, it's working on being more consistent with share repurchases by building a fortress-like balance sheet to enhance its ability to continue buying back stock during periods of lower commodity prices.

Exxon's consistent approach to the dividend

The CFO also spoke directly about how Exxon views its dividend. She highlighted three things investors needed to know about the payout:

It needs to be sustainable. It needs to be competitive. It needs to be growing.

Several factors enhance the sustainability of Exxon's dividend. It has an integrated business model (upstream, midstream, and downstream), enabling it to produce steadier cash flow than an upstream-focused company. On top of that, Exxon has a very conservative financial profile. It produced $10.1 billion of free cash flow in the first quarter, easily covering its $3.8 billion dividend outlay. Exxon also has an elite balance sheet, with $33.3 billion in cash and an ultra-low 3% net-debt-to-capital ratio. Finally, Exxon is investing in lower-carbon energy to drive future growth.

Exxon also clearly pays a competitive dividend, given that it had the third-highest total outlay last year. The company's current dividend yield is around 3.2%, more than double the S&P 500's dividend yield. Its yield is also in the range of other oil dividend stocks.

Finally, the CFO noted that Exxon needs to continue growing its dividend. It currently boasts the longest dividend growth streak in the oil patch, and that steady upward trend should continue. With visibility into earnings growth through 2027, Exxon certainly has the fuel to continue increasing its dividend. Meanwhile, its more consistent share repurchase program should steadily reduce its outstanding shares, making it easier to increase the dividend. Exxon's total dividend outlay was flat last year even though the per-share payment rose nearly 4%. It also has an elite balance sheet, giving it tremendous financial flexibility.

Exxon is among the dividend elite

Exxon is one of the best dividend payers. The company's approach is very consistent, aiming for sustainability, competitiveness, and growth. Those features make Exxon a great dividend stock for investors seeking the same characteristics.