The problem with
this Motley Fool story is that it:
- doesn't discuss analysts' view of future oil prices leading to their conclusions in this article;
- doesn't discuss oil prices at all which prevents "those playing at home" to better assess the article;
- doesn't discuss hedging and how the majors have protected themselves; and,
- doesn't say to what degree that time is less of a factor or more of a factor now that the year is about half over
With regard to the price of oil, I think we can make these assumptions:
- most oil companies have hedges in place for the rest of the year
- if the price of oil drops, those with hedges should do better than expected
- if the price of oil rises, those with hedges might do worse on paper, but overall better than expected
- bottom line: with the year half over, and hedges in place, analysts should have a range of "free cash flow estimates for the three majors discussed
So having said all that, this is the bottom line from the contributor to the story at the link:
- XOM: the writer links to another article, which I did not read; does not provide assessment of XOM in this article except to say it won't do as well as COP or CVX
- CVX: shares at $126 today could go to $145 within a year; a 15% profit in addition to paying a 3.5% dividend that's nearly as good as Exxon's 3.9%
- COP: at $70 today, could rise to $82/share based on free cash flow; a 17% profit over the next year; it has a 1.6% dividend yield
So, comparing CVX and COP:
- 15% vs 17% profit over the next year (possibly)
- 1.6% vs 3.5% dividend
- in 2015, when the price of crude oil plummeted, one company cut its dividend by two-thirds (paying one-third what it did before the crash); the other company maintained its dividend
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