Devon Energy (NYSE: DVN) has become one of the most popular oil stocks over the past year. A big part of its appeal is its trailblazing fixed-plus-variable dividend framework, which it launched last year. That policy has enabled Devon to pay out a gusher of dividends this year, thanks to higher oil and gas prices.

Coterra Energy (NYSE: CTRA) is following the path Devon laid out to create shareholder value. Because of that, like Devon, it's becoming a big-time oil dividend stock.

In early 2021, Devon Energy closed its merger-of-equals transaction with WPX Energy, creating a leading multi-basin U.S. oil and gas producer. The combined company expected that its larger scale would enable it to produce significant free cash flow, allowing it to return more money to shareholders. That led it to launch the industry's first fixed-plus-variable dividend framework. Devon would pay a fixed base dividend and make variable payments each quarter of up to 50% of its post-base-dividend free cash flow. The company aimed to use the rest of its free cash to repay debt, repurchase shares, and make opportunistic acquisitions. 

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Source Fool.com