Chevron Corporation (NYSE:CVX) has one of the most profitable upstream businesses in the sector – the company has a very rich pipeline of projects, which will allow it to maintain high production levels. One of the biggest strengths of Chevron is that the company is an oil heavy player. Most of the revenues for the company come from oil. Due to the low level of volatility in oil prices, the company has been able to maintain its impressive profitability. Chevron has been extremely profitable and the company has generated impressive cash flows in the recent past. In my opinion, Chevron remains one of the most attractive investments in the sector.
Exxon Mobil Corporation (NYSE:XOM) on the other hand has one of the best management and policy teams in place, which will ensure long-term returns. Exxon has a mix of 50/50 in terms of its dependence on oil and gas, which exposes it to increased volatility in natural gas prices. However, natural gas prices seem to be making a solid recovery as demand is improving. As a result, I believe that Exxon’s profitability will further improve.
ConocoPhillips (NYSE:COP) has managed to safeguard ROI and ROE ratios of 6% and 13%, respectively, beating the industry average for three consecutive years. With its expansion projects in the pipeline and an expected increase in operating margins, the company can stand against fuel price volatility. Its impeccable history of consistent dividends makes it a safe buy for investors seeking stable returns. In my opinion, the stock will show its true upside potential at the end of 2013 as its pipeline projects reach a stage of completion.
The article ConocoPhillips Is a Solid Investment originally appeared on Fool.com and is written by Ishtiaq Ahmed.
Ishtiaq Ahmed has no position in any stocks mentioned. The Motley Fool recommends Chevron. Ishtiaq is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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