Exxon Mobil Corporation (XOM), BP plc (ADR) (BP), Chevron Corporation (CVX): Are Reduced Share Repurchases Reason to Sell This Oil Major?

Indeed, Exxon’s last quarter report provided investors with more than enough evidence that business is less than spectacular. A combination of factors, including lackluster refining results, brought down ExxonMobil’s second-quarter net income by a whopping 57% year over year.

Naturally, as one oil major does, others may follow, and investors may be wondering which energy giant may be next in slowing its share buybacks. That’s why it was so important for Chevron Corporation (NYSE:CVX) executives to comment on its own share buyback program. Fortunately for investors, Chief Financial Officer Patricia Yarrington assured investors and analysts that since the company’s debt ratio is under control,at just 12%, its buybacks are not in jeopardy unless business conditions deteriorate severely. Chevron Corporation (NYSE:CVX) repurchased $1.25 billion of its own shares during the first and second quarter of 2013.

Are slowing buybacks truly a cause for concern?
In isolation, a reduced share buyback program may be a short-term difficulty. At the same time, it’s hard to ignore the larger picture facing Exxon Mobil Corporation (NYSE:XOM), which is a broader slowdown in overall results. The company’s poor quarter is indeed a concern, and ExxonMobil is starting to show cracks in its once impenetrable armor.

The plus side, of course, is that even with poor results from its natural gas business and a reduced buyback, Exxon is still a provider of huge shareholder rewards. The company pays billions in dividends in addition to buybacks, and has a tremendous track record of richly rewarding investors: Exxon has raised its dividend for 31 years in a row.

For investors looking for an energy major enjoying a smoother ride in the current environment, Chevron Corporation (NYSE:CVX) certainly fits the bill. In my estimation, both Chevron and Exxon are fantastic stocks that can be bought and held for decades.

The article Are Reduced Share Repurchases Reason to Sell This Oil Major? originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Chevron.

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