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 $336.7 billion and $160.8 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 0.88.  The stock doles out a 3.6% dividend yield.  It also has a trailing twelve month ROE of 9%.

Exxon’s net profit margin is 6%.  It has a debt to capital of 10% and a current ratio of 0.86.  Its EPS is projected to shrink by 29.22% this year.  Year to date, Exxon stock has gained 3.66% in share value.  The company’s shares trade at a price to book of 1.91.  It also has a forward PE of 29.74.

In the last 60 days, 1 analyst has revised their earnings estimate upwards for this quarter, but 6 analysts have revised their estimates lower.  Our EPS consensus for this quarter has gone down by 55% in the last 90 days.

Chevron

Chevron is a Zacks Rank #5 (Strong Sell).  In the Style Scores, you’ll notice that there are similarities between Chevron and Exxon, but the net profit margin is distinctly different at only 3.31%.  Chevron doles out a generous 5% dividend yield.  It has a beta of 1.12, and an ROE of 2.94%.

Chevron has debt to capital of 15.82%.  It also has a current ratio of 1.32, which is significantly ahead of Exxon’s.  The stock trades at a forward PE of 43.61.  Its EPS is projected to shrink by 20% this year.  CVX trades at a price to book of 1.03.

Year to date, Chevron’s share price has gone down 6.66%.  In the last 60 days, there have been 7 negative revisions made by analysts on their earnings estimates.  In the same time frame, 1 analyst has revised his or her estimate higher for this quarter.  Our earnings consensus for this quarter has gone down by 94% 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.  Companies which consume oil, like airliners, stand to benefit from lower oil prices.  Right now, those might yield immense returns for your portfolio.

(source: Yahoo Finance)