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Exxon vs. Chevron – The Battle of the Dividend Giants

Exxon vs. Chevron – The Battle of the Dividend Giants

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Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), two of the largest oil companies in the US, are currently taking the global oil sector by storm. They are embroiled in a high-stakes dispute over lucrative oil assets in Guyana. The clash between these energy giants has escalated with Chevron’s impending acquisition of Hess Corp. worth US$53 billion aims to gain a strategic foothold in Guyana’s vast oil reserves, particularly the Stabroek oil block.

Exxon’s claim and Chevron’s position

Exxon, with a 45% stake in the Stabroek block, has adamantly asserted its right of first refusal on Hess’s assets in Guyana, citing a joint operating agreement (JOA). The JOA, a legal framework governing operations, is being closely watched as Exxon argues that any deal involving Hess must recognize his pre-emption rights. On the other hand, Hess only has a 30% stake in the Stabroek block.

“We want to make sure that the rights granted to us under the JOA are recognized and upheld,” Exxon CEO Darren Woods said during a recent interview with CNBC, adding, “It gives us the opportunity to…ensure to ensure that we make a decision that is in the best interests of the company and its shareholders.”

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To this end, Exxon initiated arbitration proceedings before the International Chamber of Commerce in Paris after Chevron challenged its claim of a right of first refusal.

Despite the challenges, Chevron has remained steadfast in its pursuit of Hess. The company expects the shareholder vote and Federal Trade Commission investigation into the deal to be completed in the second quarter, paving the way for the acquisition to close by the end of this year.

Promising dividends

Notably, Exxon, the largest oil producer in the US, is a Dividend Aristocrat stock and is expected to become a Dividend King within the next decade. The company has increased its dividends for 41 consecutive years starting in 2023, with the last increase announced in the fourth quarter of 2023.

Exxon currently pays $3.80 in dividends annually, yielding 3.28% on the current share price. The oil giant’s four-year average dividend yield is 5.06%.

Chevron, on the other hand, has an even higher dividend yield, as it pays out $6.52 per share annually. The company’s dividend yield is 4.01% over the current share price. Furthermore, the average dividend yield over the past four years is 4.39%.

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Economic headwinds

While both Exxon and Chevron are excellent dividend stocks, their financials have suffered from the ongoing macroeconomic turmoil.

Chevron’s first-quarter earnings report reflected a mixed picture, with profits declining due to problems in its refining and international gas segments. The company’s first-quarter revenue was $46.72 billion, below the consensus estimate of $50.66 billion. Additionally, Chevron’s net income fell 16% from the same period last year to $5.55 billion. However, adjusted earnings were $2.93 per share, better than the Wall Street estimate of $2.87.

Exxon’s first-quarter performance was also disappointing, as the company’s net profit fell 28% year-over-year to $11.43 billion in the first quarter of 2024. The company attributed the poor performance to lower refining margins and plummeting natural gas prices.

The ongoing clash between Exxon and Chevron not only highlights the fierce competition for valuable assets, but also underscores the changing dynamics within the energy landscape.

Diversification with real estate on the private market

While Exxon and Chevron offer attractive dividend yields, investors may want to consider diversifying their portfolios with private market real estate investments. One attractive option is The Carling on Frankford, a Class B, 274 unit, garden style multi-family home located in Carrollton, TX, offered by RealtyMogul.

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This value-added investment opportunity is being acquired off-market from a distressed seller by ClearWorth Capital, a vertically integrated multifamily owner with more than 5,000 units under management in Texas. The sponsor plans to implement a value-added renovation package to reprice the asset and close the gap in the market, potentially leading to higher returns for investors.

RealtyMogul has a proven track record of delivering attractive returns to investors. As of March 31, 2024, the platform has achieved a total investment amount of $222,665,450 across 230 investments, with a total realized IRR of 19.5% and an overall target IRR of 15.1%.

Click here to view the offer details for The Carling

By diversifying into private market investment properties such as The Carling on Frankford through RealtyMogul, investors can potentially expand their portfolios with a combination of income and growth, complementing their positions in dividend giants like Exxon and Chevron.

Would you like to explore more real estate opportunities on the private market? Browse current investments that meet your criteria on Benzinga’s Real Estate Offer Screener.

This article Exxon vs. Chevron – The Battle Of The Dividend Giants originally appeared on Benzinga.com

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