XOM Stock vs. CVX Stock – The Verdict
Given the positives for XOM stock and CVX stock, choosing between the two comes down what you’re looking for. Both oil stocks should produce positive returns in the New Year, the question is just how.
To me, XOM stock is more like a bond than a quick-moving energy producer. Its huge cash flows — to the tune of a staggering $7.87 billion in profits for the last quarter — are the attraction. Those hefty cash flows have continuously made their way back to Exxon stock shareholders via dividends and share buybacks. Exxon managed to hand out roughly $5.8 billion of that cash back to XOM stock holders in the third quarter alone. In the long run, those dividends and buybacks will help its overall total return.
That’s good considering most analyst prices targets are only slightly the current trading price of Exxon. For XOM stock, the name of the game is consistency and it should perform as such — steadily rising and churning out dividends.
One the flipside, CVX stock is about growth. Don’t get me wrong, Chevron still mints cash flows and pays a hefty dividend. However, shares of the oil stock hasve performed and had better returns than its chief rival. That should continue into 2014 as many Chebvron projects are focused on higher oil production and in more “exciting” parts of the world.
In the end, that should help CVX stock outperform XOM stock in the total return department.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.