As oil prices experience a super-spike, energy investors often wonder: “Should I bet on Oxy, ExxonMobil, or Chevron?”
Well, the answer really depends on your goals – because it is a fallacy to think that all three stocks react in a similar manner to oil price volatility; they tell three distinct stories.
In effect, don’t expect their price action to be similar in the current backdrop.
(And that is the ONLY purpose of this post; not to recommend one over the other)
You could think of these stories as:
1. A leveraged play
2. A blue-chip anchor and,
3. A balanced play
Here’s what moves them and why the differences matter:
Oxy: The Levered Play
Strengths:
Pure-play Permian exposure and high debt make it the top performer in sharp oil rallies (e.g., +120% in 2022 vs. XOM’s +80%).
Risks: Crashes harder in downturns (e.g., -60% in 2020). Buffett’s 28% stake admittedly creates a price floor. Also, the stock’s tech-like beta could cut both ways.
Catalyst Watch: Once debt falls below $15B, share buybacks could ignite a new rally.
ExxonMobil: The Blue-Chip Anchor
Strengths: Integrated operations (refining, chemicals) smooth out volatility. $50B buyback powers steady returns.
Risks: Less upside in oil spikes (long-cycle projects delay cash flow bumps).
Dividend Safety: 41 straight years of hikes – this is better suited for income investors.
Chevron: A balanced play
Strengths: Stronger upstream focus than XOM = slightly more oil leverage. $75B buyback (2023-25) supports EPS growth.
Risks: Less diversified than XOM (e.g., smaller chemical division)
Dividend Growth: 38 consecutive annual hikes – nearly matching XOM’s reliability.
