When oil prices crashed a few years ago, it took the cash flows of oil companies down with it. Many oil producers slashed their dividends to conserve cash.

The industry, however, has come a long way since then. While oil prices are nowhere near their peak, many producers have reduced their cost structure to such a degree that some were making more money last year than they were when crude was in the triple digits. Now dividends are making a comeback in the oil patch, with several producers giving their investors big-time raises in 2019.

A barrel of oil coming through money.

Image source: Getty Images.

Like a phoenix rising from the ashes

After falling through most of 2015 and 2016, dividends started heading higher in 2017 as producers got their cost structures repositioned for lower prices. U.S. oil giant ConocoPhillips (COP 1.75%) was among the first producers to start returning cash to investors. The company, which had slashed its payout by two-thirds in early 2016, has since increased it three times, raising it 22% from that bottom. While ConocoPhillips has a long way before its dividend will be back up to where it was, it's heading in the right direction.

Check out the latest ConocoPhillips earnings call transcript.

More oil companies have joined ConocoPhillips in increasing their dividends in recent years. Anadarko Petroleum (APC), which had slashed its payout 81.5% in early 2016 to conserve cash, has now increased it twice. The first one came in late 2017, when the company boosted it a jaw-dropping 400%. Anadarko Petroleum followed that up with another 20% increase late last year. As a result, Anadarko now pays 11% more than it did at its peak before oil prices crashed.

Devon Energy (DVN 0.74%) has also been working to rebuild its dividend. Like ConocoPhillips and Anadarko, Devon took a hatchet to its dividend in 2016 to conserve cash, chopping it 75%. However, it has reduced costs to improve cash flow, which allowed Devon to give its investors a 33% raise last year and another 13% increase in 2019, boosting it a total of 50% from the bottom.

A person handing out cash from an oil pump.

Image source: Getty Images.

You get a raise, and you get a raise, and you get a raise

Not only are oil companies that once paid bigger dividends rebuilding those payouts, but also those that have traditionally offered paltry ones are beefing them up. Pioneer Natural Resources (PXD), EOG Resources (EOG 2.08%), and Diamondback Energy (FANG 2.04%) all fall into this second group.

Pioneer Natural Resources and EOG Resources were both able to maintain their dividends during the downturn because of their small size. However, they have significantly increased them as market conditions and their cash flow have improved. Pioneer initially jacked its semi-annual dividend up 300% early last year before following that up with another 100% increase in early 2019, which have combined to boost it an eye-popping 700% over the past year.

EOG Resources, meanwhile, initially increased its dividend 10% for 2018 but followed that up with another 19% raise a few months later, pushing its total to 31% for the year. EOG Resources expects to continue delivering high-octane dividend growth, with an aim to increase its payout at a greater than 19% compound annual growth rate in the future.

Meanwhile, Diamondback Energy started paying a dividend last year, which was its "first step toward rewarding shareholders for their support of our growth these last five years," according to CEO Travis Stice. Diamondback Energy followed that up by giving its investors a big 50% raise in 2019 as it aims to continue rewarding them for their support. More raises could be forthcoming, given that the company is "setting [it]self up for significant free cash flow generation in 2020 and beyond at today's strip (projected) prices while still continuing to grow production at industry leading rates."

Working hard to woo back income investors

The oil patch had been a spot where dividend investors could collect lucrative income streams before the market came crashing down a few years ago. Oil companies have since rebuilt their financial foundations and are now working to regain the trust of income investors by doling out more cash. It's becoming an intriguing area for dividend investors to consider once again.