Exxon Mobil Corporation (XOM): Which Oil Major Returns the Most Cash to Investors?

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The world’s largest oil companies, such as Exxon Mobil Corporation (NYSE:XOM), Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and TOTAL S.A. (ADR) (NYSE:TOT), are well known for their larger than average free cash flows, which allow them to return large amounts of cash to investors through stock repurchase programs and dividends. However, with each company providing equally impressive returns, which offers investors the most by way of cash returns.

Exxon Mobil Corporation (NYSE:XOM

Exxon Mobil Corporation (NYSE:XOM), the world’s largest oil company by market cap, is under pressure to return lots of cash to investors, and the company does this through a combination of buybacks and dividends. On the other hand, Chevron Corporation (NYSE:CVX) has focused more on dividend payouts rather than stock repurchases and offers a stronger yield than Exxon but smaller overall returns.

For this analysis, I am going to be analyzing the companies based on the total amount of cash returned to shareholders, per share during the period. Then I’m going to use this per-share amount to arrive at a total returned as a percentage of the average share price for the period.

Exxon Mobil Corporation (NYSE:XOM)

Billions 2011 2012 Q1 2013 Average Retuned
Number of shares in issue (Billions) 4.88 4.63 4.49
Total dividend (Billions) $9.00 $10.10 $2.56
Total repurchases (Billions) $21.13 $20.88 $5.62
Returned per share $6.17 $6.69 $1.82
Average Share Price $76.80 $82.20 $88.40
Total Returned 8.0% 8.1% 2.1% 8.2%

As the biggest company in the world, Exxon Mobil Corporation (NYSE:XOM) is under a certain amount of pressure to return cash to shareholders, which it does well. Exxon has returned around 8.2% to investors annually (based on Q1 2013 the company is set to return an annualized 8.4% this year). On a per share basis, both stock repurchases and dividends meant that shareholders received $6.17 per share in 2011 and $6.69 in 2012.  Based on the average share price for the year, this was a total cash return of 8% and 8.1%, respectively.

Chevron Corporation (NYSE:CVX)

Billions 2011 2012 Q1 2013 Average Return
Number of shares in issue (Billions) 1.99 1.95 1.93
Total dividend (Billions) $6.14 $6.84 $1.74
Total repurchases (Billions) $3.19 $4.14 $1.00
Returned per share $4.69 $5.63 $1.42
Average share price $102.60 $105.10 $116.00
Total returned 4.6% 5.4% 1.2% 4.9%

Despite trading at a higher valuation, Chevron Corporation (NYSE:CVX) does not return as much cash to shareholders as Exxon Mobil Corporation (NYSE:XOM). Chevron has returned around 4.9% to investors annually (based on Q1 2013 the company is set to return an annualized 4.8% this year). On a per share basis, both stock repurchases and dividends meant that shareholders received $4.69 per share in 2011 and $5.63 in 2012. Based on the average share price for the year, this was a total cash return of 4.6% and 5.4%, respectively.

ConocoPhillips (NYSE:COP)

2011 2012 Q1 2013 Average Return
Number of shares in issue (Billions) 1.38 1.24 1.24
Total dividend (Billions) $3.63 $3.28 $0.82
Total repurchases (Billions) $11.03 $4.96 -$0.01
Returned per share $10.62 $6.65 $0.65
Average share price $67.80 $65.00 $58.80
Total returned 15.7% 10.2% 1.1% 10.4%

ConocoPhillips (NYSE:COP)’ results are somewhat skewed due to the separation from Philips 66 last year. Indeed, in 2011 and 2012, Conoco returned 15.7% and 10.3% to shareholders, respectively; however, this is set to fall to around 4.4% this year based on the first quarter results.

That said, based on the data at the bottom of this article, it would appear that although ConocoPhillips (NYSE:COP) has reduced shareholder returns, it still has plenty of room to increase them again.

Occidental Petroleum Corporation (NYSE:OXY)

Millions 2011 2012 Average Return
Number of shares in issue (Billions) 0.812 0.809
Total dividend (Billions) 1.44 2.13
Total repurchases (Billions) $0.22 $0.50
Returned per share $2.05 $3.25
Average share price $98.20 $91.50
Total returned 2.1% 3.6% 2.8%

Lastly, Occidental Petroleum Corporation (NYSE:OXY) appears to be retuning the least to shareholders out of the whole group – the company returned around 2.8% to investors annually. On a per share basis, with both stock repurchases and dividends, shareholders received $2.05 per share in 2011 and $3.25 in 2012.  Based on the average share price for the year, this was a total cash return of 2.1% and 3.6%, respectively.

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