Chevron Edges Out ExxonMobil as Top Dividend Compounder

Investors considering ExxonMobil (XOM) and Chevron (CVX) for their dividend income may want to carefully weigh the long-term implications of each choice. Both oil giants have similar upstream businesses, but they manage operations differently.

Chevron has been rethinking its delivery model, aiming to get products directly to end-users, such as a data center that will use natural gas to power a turbine generating electricity onsite. This business expansion increases Chevron's exposure to geopolitical risk, particularly due to its major Venezuelan operations.

In contrast, ExxonMobil is investing heavily in carbon capture technology, which Precedence Research predicts will grow at an annual pace of nearly 20% through 2035. Additionally, reducing fossil fuel emissions prolongs crude oil's marketable lifespan and reduces geopolitical shock risk due to its larger size and significant cash flow.

While ExxonMobil's forward-looking dividend yield is lower at 2.6%, Chevron's higher yield of 3.7% might be more attractive in the long run. However, a closer look reveals that over the past decade, Chevron has increased its quarterly per-share payout by 66%, from $1.07 to $1.78.

ExxonMobil, on the other hand, has upped its quarterly per-share payout by 37%, from $0.75 to $1.03, over the same period. Both companies have strong track records of annual dividend increases, with Chevron at 39 consecutive years and ExxonMobil at 43.