Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), BP plc (ADR) (BP): This Oil Company Offers Growth, Income and Stability

ExxonMobil and Chevron each have a beta around 1, while BP’s legal uncertainties have resulted in a beta over 2. Despite having already paid over $30 billion to resolve claims arising from the Deepwater spill, BP plc (ADR) (NYSE:BP) is still involved in civil litigation over the Clean Water Act that could cost it another $17 billion. Although ExxonMobil and Chevron Corporation (NYSE:CVX) each carry their own legal risk (most notably, ExxonMobil in regard to LGBT discrimination and Chevron in relation to environmental degradation in Ecuador), the magnitude and strength of the claims against them pale in comparison to the legal risk associated with BP.

Chevron’s growth history and dividend yield make it a superior investment to the larger, slower growing, and lower-dividend-yielding ExxonMobil. Despite a 4.5% decrease in earnings per share in Q1 2013, Chevron Corporation (NYSE:CVX) has a stronger recent history of earnings growth than ExxonMobil. Between 2007 and 2012 Chevron’s earnings per share grew 35%, while Exxon Mobil Corporation (NYSE:XOM)’s per share earnings grew only 25%.

Though past growth is no guarantee of future success, Chevron’s growth history highlights the fact that, with a market capitalization of roughly half of ExxonMobil’s $400 billion, Chevron has more opportunity for growth than ExxonMobil and it has been more successful in recent years than ExxonMobil has in seizing its growth opportunities. Moreover, due in part to a slightly higher payout ratio than ExxonMobil, despite being a smaller company, Chevron historically pays a higher dividend than ExxonMobil: Chevron’s five year average dividend yield is 3.3% to ExxonMobil’s 2.3%.

The call is Chevron

With global trends pointing to positive growth in the energy demand in the medium and long-term, large, diverse energy suppliers such as ExxonMobil, Chevron Corporation (NYSE:CVX) and BP plc (ADR) (NYSE:BP) offer enticing investment opportunities. Among these companies, Chevron’s stock price stability, strong growth and high dividend yield make it the most attractive buy.

The article This Oil Company Offers Growth, Income and Stability originally appeared on Fool.com and is written by Colin Tweel.

Colin Tweel has no position in any stocks mentioned. The Motley Fool recommends Chevron. Colin 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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