July 28, 2022

A Through Comparison of Exxon Mobil vs. Chevron



 

The energy sector has outperformed the S&P 500 Index by an impressive margin this year thanks to the rally of oil and gas prices to multi-year highs. While the S&P 500 Index has shed about 20% this year, the Energy Select Sector SPDR ETF (XLE) has rallied 23% as of this writing. As a result, investors are flocking to energy companies Exxon Mobil (XOM) and Chevron (CVX). In this article, we will compare the two oil giants, XOM vs. CVX, in several aspects.

 

Exxon Mobil (XOM) and Chevron (CVX) are the only two oil producers that are Dividend Aristocrats. Therefore they are among the most popular oil companies in the income-oriented and dividend growth investing communities.

 

Since the onset of the coronavirus crisis, the shift from fossil fuels to clean energy sources has accelerated. Consequently, oil producers have drastically reduced their investments in growth projects, and the oil market has become exceptionally tight.

 

 

The situation has become much worse due to Western countries’ sanctions on Russia for its invasion of Ukraine. Russia produces approximately 10% of global oil output and nearly one-third of the natural gas consumed in Europe. As a result, Western countries’ sanctions have tightened the oil and gas markets. As a result, oil and gas prices have rallied to nearly 13-year highs this year. This change is an ideal business environment for all the oil majors, including Exxon and Chevron.

 

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