Better Buy for 2025: ExxonMobil or Chevron?
Friday, Jan 3, 2025 8:23 am ET
CVX --
XOM --
As we approach 2025, investors are looking for the best opportunities in the energy sector. Two prominent players, ExxonMobil (XOM) and Chevron (CVX), have caught the eye of many due to their strong performance and attractive dividends. But which one is the better buy for the coming year? Let's dive into the data and analyze both companies to make an informed decision.

1. Dividend Yield and Growth:
- ExxonMobil (XOM): The current dividend yield is 3.7%, which is nearly triple the yield of the S&P 500 (SPX), currently at 1.3%. The company has paid dividends for 42 consecutive years and has grown this payout for the past 26 years in a row, making it a Dividend Aristocrat.
- Chevron (CVX): The current dividend yield is 4.5%, which is significantly higher than Exxon Mobil's. The company has increased its dividend for 37 consecutive years, which is also an impressive streak.
2. Dividend Payout Ratio:
- ExxonMobil (XOM): The dividend payout ratio is not explicitly stated in the provided information, but it is mentioned that the company has a long-held reputation as a reliable dividend stock.
- Chevron (CVX): The dividend payout ratio is 62% using 2024 earnings, which is manageable and indicates that the company can sustain its dividend payments.
3. Revenue Growth:
- ExxonMobil (XOM): The company's revenue growth rate for the past year was -0.015, indicating a slight decline.
- Chevron (CVX): The company's revenue growth rate for the past year was -0.064, which is a more significant decline compared to Exxon Mobil.
4. Capital Expenditure (CapEx) and Free Cash Flow (FCF):
- ExxonMobil (XOM): The company plans to invest $20 billion in 2025 and a similar amount in 2026 for share buybacks, indicating a focus on returning capital to shareholders. ExxonMobil's free cash flow (FCF) in 2024 was $28.8 billion, which is expected to grow in the coming years.
- Chevron (CVX): Chevron plans to invest heavily in the Permian Basin and has agreed to acquire energy company Hess in a stock-funded deal valued at nearly $60 billion. The company's free cash flow (FCF) in 2024 was $13.9 billion, which is expected to increase annually through at least 2027.
5. Debt Levels and Capital Structures:
- Both companies have maintained strong balance sheets with substantial cash positions, indicating low debt levels and strong capital structures. Their significant cash positions and strong cash flow generation capacities contribute to this stability.
In conclusion, while both companies offer attractive income opportunities through their dividend payouts and growth rates, Chevron (CVX) appears to have a more attractive income opportunity for investors due to its higher dividend yield and manageable payout ratio. However, ExxonMobil's (XOM) focus on share buybacks and lower FCF yield suggest that it may prioritize short-term shareholder returns over long-term growth. Ultimately, the choice between ExxonMobil and Chevron will depend on an investor's individual preferences and risk tolerance.