Oil companies have a spotty history as dividend stocks. The sector was once an excellent place for income-seeking investors to get above-average yields. However, when oil prices fell off their triple-digit perch a few years ago, it took many of the sector's dividends down with it.

The industry has worked hard since that time to deal with its new reality of lower oil prices by cutting costs. These efforts have been paying dividends. That has allowed producers to begin sending more cash to their investors once again. And that means income-focused investors should start paying closer attention to this sector.

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Making good on its promise

WPX Energy (NYSE:WPX) has been working hard over the past few years to reshape its business. The company sold several assets to reduce debt as well as finance its expansion program in the low-cost, oil-rich Permian Basin. Those moves were all part of a strategy to begin returning cash to its investors by 2021.

Last year was a pivotal one for the oil and gas company as it reached its debt reduction target. The company entered 2019 needing oil to average only about $50 a barrel to fund its expansion plan.

However, thanks to higher oil prices, additional asset sales, excellent operating results, and a needle-moving acquisition, WPX Energy was able to accelerate its capital return program. It started by authorizing a $400 million share repurchase program in August. It has since initiated a quarterly dividend, which it will begin paying after closing its latest acquisition. While that payout's implied yield of 0.8% might not be all the appealing to income-seeking investors, WPX Energy should have the fuel to grow its dividend at a healthy rate in the coming years, which makes it more attractive.

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High-octane dividend growth

WPX Energy is joining many of its peers in starting small. However, what these payouts have lacked in size, they've more than made up for with growth.

Diamondback Energy (NASDAQ:FANG), for example, initiated a small dividend last year, which yielded around 0.5%. The company boosted that payout by 50% earlier this year and now yields about 0.9%. With Diamondback on track to generate a gusher of free cash in 2020 if oil remains at its current level, it will probably give its investors another sizable raise next year as well as buy back a big chunk of its stock.

Pioneer Natural Resources (NYSE:PXD), meanwhile, had been paying its investors a paltry dividend for many years. However, the company started increasing it at a rapid pace in 2018. This year alone, Pioneer doubled its payout in February and then boosted it by another 175% in August. As a result, it has now increased its dividend by an eye-popping 2,100% in the last two years, driving its yield up to 1.2%.

Oil giants ConocoPhillips (NYSE:COP) and EOG Resources (NYSE:EOG), likewise, have boosted their payouts at impressive rates. ConocoPhillips was one of several oil stocks that slashed its dividend as a result of crashing crude prices a few years ago. However, it has been growing at an accelerated rate in recent years. The company started with a 6% increase in 2016 and followed that up with two more last year -- 7.5% in February and another 7% in December -- before giving its investors a monster 38% raise this October. With that latest increase, ConocoPhillips now yields an above-average 2.7%.

EOG Recourses, on the other hand, kept its payout flat during the darkest days of the oil market downturn. It has since restarted its dividend growth engine, giving its investors two raises last year and another 31% increase this year. As a result, it now yields about 1.5%. More high-octane growth, however, is up ahead, given that the company aims to push its yield up to at least the level of the S&P 500, which is around 2%.

Energize your income portfolio

While most oil stocks don't pay high yields these days, many are growing their payouts at rapid rates. That's noteworthy, considering that dividend growth stocks have historically produced the highest total returns. That's why income investors might want to consider adding a dividend-paying oil stock to their portfolio since they could generate some high-octane total returns in the coming years as they keep increasing their payouts at a fast pace.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.