Oil continues to play a fundamental role in the global energy picture, and that's unlikely to change anytime soon. For instance, British oil major BP estimates that global oil demand will now grow through 2030 due to relaxed efforts to curb carbon emissions.
The Trump administration has famously supported domestic energy, and this should continue in the face of soaring energy requirements for data centers, which could significantly increase natural gas demands over the coming years. Combine the two trends, and it looks like investing in American energy is a smart move.
ConocoPhillips (COP +2.76%) is one of the world's largest exploration and production companies. Here is why owning this top oil stock through the rest of this decade could do wonders for your stock portfolio.
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Strong growth outlook through 2029
ConocoPhillips operates out of Houston, Texas, nestled in an oil-rich region in the southern United States. The basins in the lower 48 states, including the Delaware, Eagle Ford, and Midland, account for most of the oil and gas the company produces, although it has assets in other regions worldwide. Additionally, ConocoPhillips expanded further after acquiring Marathon Oil in late 2024.
There is a lot of shale in the southern United States, which is cheaper and faster to drill than deepwater wells. ConocoPhillips generated $7.3 billion in free cash flow in 2025, and management anticipates that it will increase by $1 billion annually in 2026, 2027, and 2028. Then, free cash flow could surge by another $4 billion in 2029, when a large project in Alaska begins producing its first oil. In all, company-wide cash flow could double by the end of the decade.
NYSE: COP
Key Data Points
The stock will likely return tons of cash to shareholders along the way
Outside of investing in oil and gas projects, oil companies love returning cash to shareholders. But as a pure exploration and production company, market prices for oil and gas dramatically impact how much ConocoPhillips can spend on dividends and share repurchases.
Management's cash flow projections assume an average WTI crude oil price of $70 per barrel. WTI currently trades at $63, near its lows over the past five years. Oil prices would need to implode and stay low to seriously jeopardize the company's cash flow. On the other hand, there's an upside if oil prices remain higher.
Even though ConocoPhillips funded its $22.5 billion Marathon acquisition with stock, management wisely spent heavily on repurchases shortly after closing the deal, when higher commodity prices boosted cash flow. Today, the company's share count is actually 9% lower than five years ago.
ConocoPhillips stock currently yields 3%, and the company has set the stage for more dividend growth and repurchases over the coming years. The stock should stand out to anyone looking for a top-notch oil stock to benefit from America's energy boom.
