Welcome back to our YouTube Channel! Today, we are pitting two of the largest oil companies against each other to determine which is a better stock to buy! ExxonMobil (XOM) versus Chevron (CVX). Head to head. We are not messing around with this video!
We continue our quest to find undervalued dividend stocks to buy. With the oil sector rebounding, there was not a better time than today to run the two companies through our dividend stock screener to see who comes out as king of the ring. In fact, the price per barrel of oil is near $80 per barrel. Over double its price last year.
On the journey to financial freedom, investing with dividend stocks allows you to add to your passive income stream by means of dividend income. The oil sector offers strong dividend yields, as both of these stocks yield over 5%!
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The two companies are arch rivals (although at one point in the pandemic, ExxonMobil and Chevron talked about merging). Of the two companies, Exxon has the larger market cap!
The companies diverge when it comes to the recent dividend history. Chevron has announced annual dividend increases for 19 consecutive years. However, while Exxon has a current dividend increase streak of 38 years, their streak is in jeopardy if they do not announce a dividend increase in October. Hopefully Exxon will not lose their Dividend Aristocrat Status.
Ultimately, the goal is to see which company is a better dividend stock to buy today, based on their current stock metrics. To figure this out, we will run the companies through the Dividend Diplomats Stock Screener. The Screener focuses on 3 key metrics:
1.) Price to Earnings (P/E) Ratio that is less than S&P 500, preferably under 18-20x earnings
2.) Dividend Payout Ratio that is less than 60%, with 40%-60% being the perfect sweet spot
3.) Dividend Growth & Dividend Growth Rate history for the company is critical
*Bonus Metric*: The Dividend Yield is also looked at, as a bonus or cherry on top after passing the 3 metrics above.
The stock prices used in this analysis are as of September 28, 2021.
Upon review of the metrics, you will see the companies have a few key differences. Both of us agree that one company is the clear winner. You'll have to watch the video to find out.
Please share with us your thoughts about ExxonMobil and Chevron. Which company do you think is a better dividend stock to buy? Are you buying the oil sector or avoiding it?
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As always, we recommend conducting your own research to make your own decisions.
