Exxon Mobil Corporation (XOM)vs Chevron Corporation (CVX)

Quick verdict

Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) appeal to different investors. On our six-factor framework, XOM scores 4.5 and CVX scores 1.5. XOM looks cheaper on the multiples that matter, while neither clearly grows faster and XOM earns higher returns on capital. Overall, XOM edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Exxon Mobil Corporation operates in Oil & Gas Integrated (Energy), while Chevron Corporation sits in Oil & Gas Integrated (Energy). Because both compete in the same sector, this is a direct head-to-head and the financial differences below are especially meaningful. XOM carries a beta of 1.39 versus 0.97 for CVX, meaning XOM has historically been the more volatile of the two.

Valuation

On valuation, XOM is the cheaper stock. XOM trades on a forward P/E of 21.47 and EV/EBITDA of 21.9, against 43.59 and 30.27 for CVX. Price-to-sales is 18.26 vs 19.72, and free-cash-flow yield is 3.2% vs 6.2%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

neither clearly is the faster grower. XOM has compounded revenue at 19.7% over three years with EPS growth of 25.2%, while CVX has delivered 24.4% revenue and 22.0% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, XOM is stronger. XOM posts a 11.8% operating margin, 38.0% return on equity and 29.8% return on invested capital. CVX posts 11.4%, 49.6% and 21.3% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

CVX has the safer balance sheet. XOM carries net-debt/EBITDA of 4.09x with a current ratio of 3.46, versus -1.36x and 1.08 for CVX. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year XOM returned 62.2% against -0.1% for CVX; on a three-year annualised basis it is -2.3% vs -7.5%. XOM yields 0.0% and CVX yields 0.5%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, XOM is the better fit on today's multiples. Growth investors will likely prefer CVX, which is expanding faster. Income investors should lean toward XOM for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour XOM for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: XOM
• Growth: CVX
• Income: XOM
• Quality: XOM

Frequently asked questions

Is XOM or CVX the better buy right now?

Neither is universally "better." XOM scores 4.5 and CVX scores 1.5 on our six-factor framework. XOM is cheaper, neither clearly grows faster, and XOM is higher quality — so the right pick depends on your objective.

Which stock is cheaper, XOM or CVX?

XOM is the cheaper stock across forward P/E (21.47 vs 43.59), EV/EBITDA (21.9 vs 30.27) and price-to-sales (18.26 vs 19.72).

Which has grown faster, XOM or CVX?

neither clearly has the stronger growth profile, with three-year revenue CAGR of 19.7% for XOM versus 24.4% for CVX.

Which stock pays a bigger dividend?

XOM yields 0.0% and CVX yields 0.5%, so XOM is the stronger income choice.