The past year has not been kind to the shares of ConocoPhillips (COP -1.08%). The share price has fallen around 22% or so, which is twice the drop of the broader energy sector, using Energy Select SPDR ETF (XLE -1.21%) as an industry proxy. That divergence might lead some investors to wonder what’s wrong with ConocoPhillips right now. The answer is that the stock and business aren’t the same thing.

What does ConocoPhillips do?

ConocoPhillips is what is known as an independent energy producer. Essentially, all it does is drill for oil and natural gas. This means it operates in the upstream of the broader energy sector. Energy prices are highly volatile and often move very quickly because of geopolitical news and supply/demand changes. That can lead to swift swings in the sales and earnings of companies like ConocoPhillips.

That’s the big story today, with energy prices hitting a bit of a weak patch after soaring coming out of the height of the coronavirus pandemic. Simply put, ConocoPhillips’ income statement results are a bit weak right now. The company’s adjusted earnings per share tallied up to $1.42 in the second quarter of 2025 versus $1.98 in the same quarter of 2024. In some ways, it makes sense that investors are downbeat on the stock.

However, it is important to note that this type of earnings volatility is perfectly normal for ConocoPhillips’ business. It is just how the energy industry works. To highlight that, the company’s realized price per barrel of oil equivalent (BOE) in the second quarter of 2025 was 19% lower than it was in the second quarter of 2024. That was almost entirely out of the company’s control (hedging can sometimes soften the impact of commodity price swings).

Data by YCharts.

ConocoPhillips is executing well as a business

To be fair, ConocoPhillips is not a stock that a conservative investor will probably want to buy. A better option in the energy patch would be a pipeline operator like Enterprise Products Partners, which is a toll-taker paid to move oil and natural gas. With revenue and earnings tied to energy prices, only more aggressive types will want to buy ConocoPhillips.

And ConocoPhillips happens to be a fairly well-run business. The best example of that is the company’s dividend history. While the dividend has gone up and down over time, the company has paid a dividend consistently for decades. That speaks to a business that is being operated at a high level despite the fact that its top and bottom lines can be volatile at times.

More specific to today, ConocoPhillips is seeing some notable operating success that is being overshadowed by energy price moves. For example, ConocoPhillips completed its acquisition of Marathon Oil in late 2024, expanding its business. The integration effort has been outdistancing the company’s own expectations. There was a 25% uplift in the new resources added versus projections. A 100% increase in cost synergies over expectations. And the company has been able to ink 25% more asset sales than projected, and more quickly than forecast, as ConocoPhillips looks to use the deal to refocus around its best assets.

Basically, ConocoPhillips is doing a pretty good job right now. In fact, despite the revenue and earnings hit caused by lower energy prices, the company actually increased production 3% year over year in the second quarter of 2025.

ConocoPhillips could be a good way to get direct energy exposure

All in, ConocoPhillips as a business is doing just fine. When oil prices recover, as they always have before, it will likely be in a better position to benefit than it was a year ago. The stock, however, is a different story, since investors are focusing on revenue and earnings, which are inherently volatile and relatively weak at the moment. That’s what’s wrong with the stock, even though there’s really nothing wrong with the business. If you are looking for energy exposure, however, ConocoPhillips’ business could make it an interesting stock to dig into.

If there is one thing that investors need to understand about the energy sector, it is that oil and natural gas prices are inherently volatile. But there’s a somewhat counterintuitive takeaway here. Sometimes the best investment opportunities arise when business in the oil space isn’t going so well.

Which is why investors might want to buy ConocoPhillips (COP -2.80%) today. Indeed, the company’s successful business overhaul is so obvious that it is hard not to notice (at least partly because the company is so happy to point it out).

Not such a great quarter for sales and earnings

ConcoPhillips’ earnings in the second quarter of 2025 weren’t great when you compare it to the same quarter in 2024, with a drop from $1.98 per share last year down to just $1.56 this year. But that doesn’t even do justice to the energy company’s earnings decline, since pulling out a one-time gain in the second quarter of 2025 drops the total down to $1.42 per share. That’s the worst quarterly earnings outcome in over a year and down sequentially from even the first quarter.

But that’s kind of how things go in the energy sector, where oil and natural gas prices drive the top and bottom lines of the income statement. In fact, it isn’t even remotely unusual for ConocoPhillips’ earnings to be volatile from quarter to quarter. That said, the energy sector is, generally, not in the best place today relative to the highs achieved in the price rebound coming out of the coronavirus pandemic.

For example, ConocoPhillips’ share price has fallen around 25% from its late 2022 highs. For comparison, Brent Crude, a key international oil benchmark, and West Texas Intermediate Crude, a key U.S. oil benchmark, have both lost about a third of their value over the same span. This could actually be a good time for more aggressive investors to consider buying ConocoPhillips.

An obvious reason to like ConocoPhillips

Assuming you can stomach the uncertainty of a commodity-based business like ConocoPhillips, there are good things happening at the company. Notably, it has been integrating the acquisition of Marathon Oil and executing above expectations. For example, it added 25% more resources than projected when the deal was inked. Despite that, it also managed to reduce the number of rigs it was operating on the added properties by 30%. All in, it was able to double the business synergies it projected, saving $1 billion in costs annually. And management managed to set up $2.5 billion in dispositions in nine months, when it had previously been looking to shed $2 billion in assets over a two-year period.

The dispositions are a special consideration. ConocoPhillips isn’t looking to get big for the sake of getting big. It is attempting to optimize its portfolio of assets so it can focus on only its best properties. That, in turn, should help to improve profitability over the long term. To be fair, even the best properties won’t change the variability in energy prices. But wider profit margins means the company will make more money when times are good and have more downside leeway when times are bad. ConocoPhillips isn’t hiding its success, it is proudly telling investors all about what it has achieved. In other words, there are obvious improvements taking shape at the business.

This is the setup for better performance in the future

To state the obvious again, as an energy company, energy prices are going to dictate ConocoPhillips’ financial results. Conservative investors looking for consistent earnings or reliable dividends (the company pays a dividend regularly, but the amount of the dividend is highly variable) probably shouldn’t buy the stock.

But if you are looking for direct exposure to energy prices, ConocoPhillips could be a solid choice given management’s efforts to overhaul the business. When commodity prices take off again, the upgrades made to the portfolio will help supercharge ConocoPhillips’ financial results. And Wall Street will almost certainly reward the stock for that.

Investing in dividend stocks is a great way to steadily build your wealth. These companies can provide you with a solid base return that tends to grow over time as they increase their earnings and dividend payments. That combination of dividend income and earnings growth has historically added up to a much higher total return over the long term compared to non-dividend payers.

ConocoPhillips (COP -1.12%) and VICI Properties (VICI -0.15%) are two rock-solid dividend stocks worth adding more of right now or adding to your portfolio if you don’t already hold them. Here’s what makes them stand out.

The fuel to deliver high-octane dividend growth through the end of the decade

ConocoPhillips is on the cusp of a major growth wave. The oil and gas producer has invested heavily to transform its business into a cash-flow growth machine. It currently has decades of inventory with a supply cost below $40 a barrel. As a result, it’s producing lots of free cash flow at the current oil price point in the upper $60s. Meanwhile, its long-cycle investments in liquified natural gas (LNG) and Alaska should fuel robust free-cash-flow growth over the coming years.

The company’s 2024 merger with Marathon Oil has paid off even more than anticipated. The oil giant initially expected to capture $500 million in annual cost savings within the first year of closing the deal, which it subsequently doubled to $1 billion. It now expects to deliver $1 billion in additional cost and margin enhancements from this merger by the end of next year. On top of that, its investments in a trio of global LNG projects and Willow development in Alaska should add another $6 billion in incremental free cash flow to its annual total by 2029.

This surge in free cash flow will give ConocoPhillips more fuel to increase its already attractive dividend (at over 3%, it’s more than double the S&P 500‘s 1.2% yield). The company intends to deliver dividend growth within the top 25% of companies in the S&P 500 in the future. That high-octane growth rate from a company that already offers a high-yielding payout makes it a very attractive dividend stock to add to these days.

The high-end dividend growth should continue

VICI Properties has built one of the country’s largest experiential real estate portfolios. The real estate investment trust (REIT) invests in market-leading gaming, hospitality, wellness, entertainment, and leisure destinations. It leases the properties it owns to high-quality operating companies under long-term, triple-net leases (NNN), an increasing percentage of which escalates rents at rates tied to inflation (42% this year, rising to 90% by 2035). As a result, VICI Properties generates very stable and steadily rising rental income.

The REIT also invests in real estate-backed loans. These investments provide it with incremental interest income to support its dividend and often come with the option to acquire the underlying real estate in the future.

VICI Properties often partners with leading experiential companies. It provides them with capital to expand (through sale-leaseback transactions, real estate loans, and other financing), which supplies the REIT with new investment opportunities.

This strategy has paid big dividends for investors over the years. VICI Properties has increased its dividend payment every year since its formation seven years ago. It has grown its payout at a 7.4% compound annual rate, significantly faster than the 2.3% compound annual dividend growth rate of other REITs focused on investing in NNN real estate. With its dividend yield currently over 5% these days, VICI Properties is an attractive income investment. Meanwhile, with more portfolio growth ahead as its partners continue expanding, this REIT should provide investors with a lucrative and steadily rising stream of passive dividend income backed by its high-quality real estate portfolio.

Top-notch dividend stocks

ConocoPhillips and VICI Properties are great dividend stocks to add to these days. They currently offer higher-yielding dividends that should continue growing at above-average rates in the coming years. That positions these dividend stocks to produce attractive total returns from here.

Matt DiLallo has positions in ConocoPhillips and Vici Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.