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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