Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), ConocoPhillips (COP), and Royal Dutch Shell plc (ADR) (RDS.B): Not All Oil Dividends Are Created Equal

Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are premier dividend growth stocks, with the track records to prove it. Exxon Mobil Corporation (NYSE:XOM) increased its dividend by 21% in 2012 and then again by 11% early this year. Chevron Corporation (NYSE:CVX), meanwhile, recently provided its investors with a solid 11% dividend increase and has raised its shareholder payout by 9% compounded annually over the past five years.

ConocoPhillips (NYSE:COP) and Royal Dutch Shell plc (ADR) (NYSE:RDS.B) have grown their payouts at lower rates than Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), due to their heftier current dividend levels. To illustrate, ConocoPhillips (NYSE:COP) hasn’t raised its dividend since early 2011. For its part, Royal Dutch Shell plc (ADR) (NYSE:RDS.B) did recently bump up its dividend by 4.6%, but over the past five years, the company has grown its distribution by only 2% compounded annually.

The Foolish takeaway

In the end, what we’ve got here are four highly profitable energy companies that reward their shareholders generously through reliable quarterly dividends. While the differences in how each stock distributes dividends to shareholders might seem subtle, these differences mean each of these stocks might appeal to different investor groups.

Dividend growth investors, or in other words, those with longer time horizons with more time to let their dividends compound, should favor ExxonMobil and Chevron. Those two companies are growing their payouts at higher rates, and after several decades, will compound to greater income levels.

On the other hand, investors in need of current income should prefer ConocoPhillips (NYSE:COP) and Royal Dutch Shell plc (ADR) (NYSE:RDS.B). For example, those investors in or nearing retirement who need income now will be able to produce higher income levels from these two stocks. While their payouts won’t grow as fast over longer periods of time, some investors simply need current income to help pay for life’s inevitable expenses.

No matter which camp you fall into, the energy sector has a stock for you.

The article Not All Oil Dividends Are Created Equal originally appeared on Fool.com.

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

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