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ExxonMobil Loses $225 Billion In Market Cap Against Chevron

ExxonMobil Loses $225 Billion In Market Cap Against Chevron

Twice over the past two weeks, ExxonMobil
XOM
has made headlines for all the wrong reasons.

Last week the utility NextEra Energy
NEE
surpassed the market capitalization of ExxonMobil to replace it as the largest U.S. energy company.

This week, there was another milestone. At some points over the past decade, ExxonMobil — the biggest of “Big Oil” in the U.S. — was worth as much as $225 billion more than Chevron
CVX
. That size advantage totally disappeared on October 8, 2020, when Chevron’s value closed the day higher than ExxonMobil’s.

If you look at the chart, it’s quite different than the story with NextEra. ExxonMobil’s value fell sharply this year, but NextEra has had a really good year. Chevron, on the other hand, has struggled with the Covid-19 pandemic along with other oil and gas producers. They just haven’t struggled as much as most others.

The past decade has been a tough one for oil producers everywhere, but Chevron has managed to hold its value for most of the decade. Both companies have long been favorites among dividend investors (and note that the chart doesn’t reflect the dividend income generated by these companies), but Chevron held up better and paid more income to investors.

Where did things go so wrong for ExxonMobil? I have often pointed to the company’s ill-timed $36 billion acquisition of natural gas producer XTO Energy in December

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Chevron tops Exxon Mobil market cap for first time

Chevron tops Exxon Mobil market cap for first time



a screen shot of a computer: The logo of Chevron is shown on a monitor above the floor of the New York Stock Exchange in New York


© Reuters/Lucas Jackson
The logo of Chevron is shown on a monitor above the floor of the New York Stock Exchange in New York


(Reuters) – Chevron’s market value leapfrogged that of Exxon Mobil for the first time on Wednesday during a week in which it closed a $4.1 billion, all-stock deal for Noble Energy, a smaller oil and gas producer.

Chevron’s market cap ended the day around $142 billion, topping Exxon Mobil’s $141.65 billion market value at the end of trade, according to Refinitiv data and Chevron SEC filings pertaining to the Nobel deal.

Shares in Chevron closed up 2.047% on Wednesday and Exxon Mobile rose just 0.3%.

Chevron’s finances are stronger and its shares have performed better than its larger rival. It has shifted away from costly megaprojects favored by oil majors, and moved sooner this year to cut costs amid the coronavirus-induced sharp drop in oil and gas prices.

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Investors have shunned fossil fuel companies and the energy sector is the worst performing on the S&P 500 year to date. Chevron’s stock is down a lesser 38% year to date compared to a 52% decline at Exxon, which this year was removed from the Dow Jones Industrial Average, a position it held since the index was created.

Exxon’s weak earnings have forced it to borrow to finance its nearly $15 billion a year shareholder dividend and cover spending on new projects.

In part, Chevron’s finances have benefited from its faster divesting of unwanted assets. Exxon has struggled to unload unwanted oilfields despite promising to accelerate the sales in early 2019. Exxon officials have said they are reviewing all

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Exxon’s Market-Value Crown in Energy Passes to Chevron, NextEra

Exxon’s Market-Value Crown in Energy Passes to Chevron, NextEra

(Bloomberg) — Chevron Corp. overtook Exxon Mobil Corp. as the largest oil company in America by market value, the first time the Texas-based giant has been dethroned since it began as Standard Oil more than a century ago.

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The reordering of the oil giants says more about Exxon than Chevron.

The company has been struggling to generate enough cash to pay for capital expenditures, leaving it reliant on debt and putting pressure on its $15 billion-a-year dividend. It pursued a series of expensive projects that promised growth after years of stagnating production. Those became a drag on its cash flow when the pandemic hit. Chevron has meanwhile fared relatively well, having emerged with the strongest balance sheet among its Big Oil peers.

Even so, both Exxon and Chevron are receding into the rear-view mirror of NextEra Energy Inc. The world’s biggest producer of wind and solar power has now surpassed the oil majors, leading a spectacular rally in power stocks as much of the world shuns fossil fuels to fight climate change.



chart: NextEra's market value now exceeds Chevron, Exxon


© Bloomberg
NextEra’s market value now exceeds Chevron, Exxon

NextEra ended Wednesday with a market capitalization of $145.5 billion, topping Exxon’s $141.6 billion. Last month, the power giant eclipsed Chevron, now valued at $142 billion.

Exxon’s shares have tumbled more than 50% this year, and its second-quarter loss was its worst of the modern era. In August, it was ejected from the Dow Jones Industrial Average.

Chevron, meanwhile, has fared relatively well amid a Covid-fueled downturn, having emerged with the strongest balance sheet among its Big Oil peers. It was able to complete its $5 billion acquisition of Noble Energy Inc. last week.

READ: Exxon’s Humbling Fall From Oil Juggernaut to Mediocre Company

NextEra has emerged as the world’s most valuable utility, largely by betting big

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