Exxon (XOM) Vs. Chevron (CVX): Which is the better Big Oil Stock?
Exxon (XOM) and Chevron (CVX) dominate the oil and gas space with their massive market caps of $305 billion and $146.7 billion respectively. But which stock makes a better investment?
Both of these stocks depend on the same commodity, and their chart patterns reflect their similarities. However, no two companies are identical. Risks and rewards for both stocks are different, as are returns and dividends. Below, we will take a look at some key stats from both companies to determine which stock makes a better investment.
Exxon Mobil
XOM is a Zacks Rank #3 (Hold). Exxon has a beta of 0.86. The stock doles out a 4% dividend yield. It also has a trailing twelve month ROE of 13%.
Exxon’s net profit margin is 7%. It has a debt to capital of 9.79% and a current ratio of 0.88. Its EPS is projected to shrink by -46.42% this year. Year to date, Exxon stock has plummeted 20%. The company’s shares trade at a price to book of 1.68. It also has a forward PE of 17.7.
In the last 60 days, 5 analysts have revised their earnings estimates upwards for this quarter, but 10 analysts have revised their estimates lower. Our EPS consensus for this quarter has gone down by 10% in the last 90 days.
Chevron
Like Exxon, Chevron is a Zacks Rank #3 (Hold). In the Style Scores, you’ll notice that there are many other similarities to Exxon, such as a net profit margin of 6.95%. Chevron doles out a generous 5.48% dividend yield. It has a beta of 1.13, and an ROE of 7.79%.
Chevron has debt to capital of 15.82%. It also has a current ratio of 1.44, which is significantly ahead of Exxon’s. The stock trades at a forward PE of 20.64. Its EPS is projected to shrink by 62.66% this year. CVX trades at a price to book of 0.94.
Year to date, Chevron’s share price has gone down 30.52%. In the last 60 days, there have been 11 negative revisions made by analysts on their earnings estimates. In the same time frame, four analysts have revised their estimates higher for this quarter. Our earnings consensus for this quarter has gone down by 21.6% over the last 90 days.
Bottom Line:
What you’re getting from these two companies is very similar, but not quite the same. While you have less volatility from Exxon, Chevron offers a higher dividend. The bottom line here is that your choice to invest in either company ultimately comes down to your preference for risk.
If you’re betting on a price turnaround for oil and energy, then you may choose to invest in Chevron to reap more rewards. If you are a little less certain and want to avoid risk, but still believe in a positive outlook for oil in the long term, then Exxon is probably a better choice. However, one should note that neither of these stocks have a buy rank, so it may be best to avoid buying shares of either company right now.
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EXXON MOBIL CRP (XOM): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
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