Chevron (CVX -0.28%) and ExxonMobil (XOM -0.39%) are two of the world’s largest integrated energy companies. They both own upstream exploration and extraction businesses, midstream pipelines, and downstream refineries.
Over the past 12 months, Chevron’s stock has rallied 45% while ExxonMobil’s stock has risen 58%. Both stocks benefited from rising oil prices, but which stock is the better buy right now?
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The differences between Chevron and ExxonMobil
Chevron is smaller than ExxonMobil, but both companies generate most of their revenue from their upstream businesses. However, Chevron generates more of its profits (about 80%) from its upstream business than ExxonMobil (about 70%).
That’s because ExxonMobil operates a larger downstream business — which acts as a secondary profit engine — than Chevron. ExxonMobil’s downstream business produces a lot of petrochemicals, while Chevron’s downstream business has minimal exposure to that market.
CVX – Chevron
$224.37-$0.62 (-0.28%)
NYSE · As of 4:00 PM ET 10/19/26
When crude oil prices rise, upstream businesses typically grow their revenues faster than their expenses. However, downstream businesses often struggle as their input costs rise. When crude oil prices decline, upstream businesses struggle, but downstream businesses fare better — as long as the crack spread (between crude oil costs and retail fuel prices) remains stable.
Therefore, Chevron’s streamlined, upstream-heavy business model makes it a more attractive investment than ExxonMobil when oil prices spike. But when oil prices pull back, ExxonMobil’s scale and downstream diversification could make it a more compelling investment.
XOM – ExxonMobil
$178.28-$0.70 (-0.39%)
NYSE · As of 4:00 PM ET 10/19/26
However, the price of Brent crude oil — currently at $110 per barrel — remains far above ExxonMobil’s breakeven price (for covering capex and dividends) of $35 per barrel and Chevron’s breakeven price of $50 per barrel. Both companies plan to increase their oil and gas production by about 3% annually through the end of the decade.
Chevron pays a forward yield of 3.2%, while ExxonMobil pays a lower forward yield of 2.3%. Chevron has raised its dividend annually for 39 consecutive years, while ExxonMobil has maintained that streak for 43 years. If they reach 50 years, they’ll become Dividend Kings.
Both companies have plenty of room to raise their dividends. Over the past 12 months, Chevron and ExxonMobil had payout ratios of 67% and 53%, respectively.
What will happen over the next few years?
In 2025, Chevron’s EPS dropped 32% as crude oil prices declined, its refining margins shrank, and it finalized its acquisition of Hess Corporation. But from 2025 to 2028, analysts expect its EPS to grow at a 26% CAGR as it expands in Guyana (one of the world’s fastest-growing oil regions) by integrating Hess’ assets; produces more oil in the Permian Basin and Kazakhstan, and accelerates its deepwater projects. Yet its stock still trades at 15 times next year’s earnings.
In 2025, ExxonMobil’s EPS dipped 15% as it faced some of the same headwinds as Chevron and divested its weaker assets. But from 2025 to 2028, analysts expect its EPS to grow at a 20% CAGR as it integrates its recent acquisition of Pioneer Natural Resources (which expanded its reach in the Permian Basin), increases its production in Guyana, and prioritizes the production of higher-margin chemical performance products and specialized fuels at its downstream business. Its stock also trades at 15 times next year’s earnings.
Which oil stock is the better buy?
Chevron and ExxonMobil both look fundamentally cheap because they’re valued as cyclical commodity stocks rather than higher-growth energy plays. However, they’re both still solid long-term investments for investors who can stomach the short-term fluctuations in oil prices.
But if I could only pick one, I’d choose Chevron over ExxonMobil for three simple reasons: it has more exposure to rising oil prices, it’s growing faster, and it pays a higher dividend. ExxonMobil is a fine all-weather stock, but its larger size and lower dividend make it a bit less attractive.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
