Dividend Safety in the Oil & Gas Giants: Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), Occidental Petroleum Corporation (OXY)

Page 2 of 2

Chevron’s yield currently sits at 3.08%, and their P/E is at 8.77. Both of those numbers are better than those that can be found at Exxon. The payout ratio at Chevron is a little higher than Exxon’s but by no means is it terrible at 26%. Chevron still has plenty of room to maneuver in terms of yield with a payout ratio at that level.

Pricing ratios at Chevron Corporation (NYSE:CVX) are much of the same; we have a 0.95 when it comes to sales and we have a 1.72 in terms of price to book value. Both numbers are right in line with what we would typically see from the industry.

A Name You Don’t Typically Hear

You hear people talking about Exxon and Chevron, but rarely do you hear a mention of “Oxy” even though the company is the largest oil producer in the state of Texas. The company also has more than 40,000 employees around the world; it’s weird that their name is not better known amongst the masses, especially when you throw in that they’re worth some $67 billion.

Occidental Petroleum Corporation (NYSE:OXY) has the faster growing dividend of the bunch at 16.64% annually over the last five years. Their current yield is 3.1%, right above that of Chevron. With them being a smaller company and paying a higher dividend, you’d be expecting a much higher payout ratio along with it, and that’s what you get. It’s at 38%, a number that isn’t all that bad.

The P/E ratio at Occidental Petroleum Corporation (NYSE:OXY) is 14.54, or 10.61 if you prefer to look at forward numbers. Price to sales is an incredibly high 2.77, and price to book is right in line at 1.65. Overall, the company is priced a little higher than the others, but that could be due to the fact that there’s more room to grow from the $67 billion range than there is when you’re worth hundreds of billions.

Bottom Line

All three of these companies are solid in terms of building and growing a stable base of dividends. I like all three and I would be hard pressed to pick between them. I currently own ConocoPhillips (NYSE:COP) in my own portfolio, and I like how that has been going so far.

The article Dividend Safety in the Oil & Gas Giants originally appeared on Fool.com and is written by Ash Anderson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2