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Will Exxon, Chevron Pay Up Soon As Rivals Get More Generous?

Exxon Mobil (XOM) and Chevron (CVX) and will report first-quarter results before the market opens on Friday as oil prices continue to rally. Exxon stock and Chevron stock rose.




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The reports come as rivals Royal Dutch Shell (RDSA) and BP (BP) return more capital to shareholders again after curbing dividends and buybacks during the pandemic to conserve cash.

Exxon Mobil

Estimates: Earnings seen rising 11% to 59 cents per share but revenue is expected to fall 2% to $55.2 billion.

Results: Check back before the market opens Friday.

Stock: Shares rose 0.9% to 58.59 on the stock market today. Exxon stock has formed a flat base with a 62.65 buy point, according to MarketSmith chart analysis.

Investors should watch Exxon’s cash-flow shortfall. Analysts have been concerned about the oil major’s ability to maintain its dividend.

Last year, oil majors suspended buybacks as oil prices crashed during the pandemic. But they are faring better this year. Shell announced Thursday that it raised its dividend 4%, marking the second increase in six months amid rising oil demand. Shell had cut its dividend for the first time since World War II in April 2020 as the coronavirus pandemic decimated demand.

And on Tuesday, BP announced that it plans to resume share buybacks in Q2, becoming the first oil major to do so.


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Chevron

Estimates: EPS is seen falling 26% to 95 cents with revenue down 2% to $30.9 billion.

Results: Check back before the market opens Friday.

Stock: Shares were up 1.5% to 106.78 Thursday. Chevron stock is in its own flat base with a 112.80 entry.

The resumption of BP stock buybacks and Shell’s dividend hikes could put more pressure on U.S. rivals to follow along soon.

But Chevron told shareholders in March that repurchases wouldn’t resume until management is confident they can be sustained for multiple years.

Still, even smaller oil companies are returning more capital to shareholders. On Wednesday, shale producer Continental Resources (CLR) said dividend payments will resume at double the prior rate.

And ConocoPhillips (COP), the largest independent oil producer, resumed its share repurchases last month.

Follow Gillian Rich on Twitter for energy news and more.

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