- Oil majors continue to underperform the broader markets.
- In terms of shareholder returns among the S&P 500 index, Exxon and Chevron have climbed up in the rankings of the most generous stocks in recent months.
- The top two U.S. oil and gas producers also both reported on Friday higher production, especially from the Permian.
Big Oil has seriously underperformed the overall market over the past year, and it’s not just because of the decline in oil prices.Investors are not convinced that oil companies—despite supplying essential products for today’s way of living such as gasoline, chemicals, fibers and what-not—have a future. Instead, they are focused on the trendy technology stocks, which have now become the darlings of the stock market. Investors are not convinced that oil companies—despite supplying essential products for today’s way of living such as gasoline, chemicals, fibers and what-not—have a future. Instead, they are focused on the trendy technology stocks, which have now become the darlings of the stock market.
The top U.S. oil producers, ExxonMobil and Chevron, have been trying to win investors back by adding large share buybacks to the constant dividend increases they have been doing over the past four decades. In terms of shareholder returns among the S&P 500 index, Exxon and Chevron have climbed up in the rankings of the most generous stocks in recent months, according to data compiled by Bloomberg. But they can’t compete with the massive share repurchases by Apple, Alphabet, Microsoft, or Meta.
In terms of shareholder returns from buybacks and dividends combined, Exxon ranks fourth among S&P 500 companies, behind Apple, Alphabet, and Microsoft. Chevron is seventh, with JP Morgan and Meta between it and Exxon. Shareholder returns at Exxon and Chevron are at all-time highs, and profits last year were the second-highest in a decade, right after the record highs of 2022 when all Big Oil firms posted massive earnings amid rallying oil and gas prices.
Source: oilprice.com