Exxon Mobil Corporation (XOM), Royal Dutch Shell plc (ADR) (RDS.B): Should Poor Earnings From Big Oil Make Investors Panic?

Revenue fell slightly less than 5% from the year-ago period, but results in future quarters should be boosted by the fact that ConocoPhillips (NYSE:COP) now expects to produce an average of 1.52 million barrels of oil equivalent per day, versus its previous estimate of 1.49 million barrels.

And, it’s worth noting that ConocoPhillips (NYSE:COP) , like its competitors, is also extremely shareholder-friendly. ConocoPhillips (NYSE:COP)’s dividend yield exceeds 4%, and the company recently increased its dividend.

The Foolish bottom line

In times like these it’s important to remember that one quarter doesn’t make or break a company. Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell plc (ADR) (NYSE:RDS.B) are two giants in the integrated energy industry. Investors may need to temper their growth expectations, but that has more to do with the law of large numbers than a legitimate problem with either company.

Royal Dutch Shell holds a market cap in excess of $200 billion, and Exxon holds double that in market value. Moreover, both companies hold strong balance sheets, trade for modest valuations, and provide compelling dividend yields.

On the topic of dividends, I’d prefer Royal Dutch Shell to Exxon for its outsized yield. Exxon’s 2.75% yield still beats the 2% yield on the broader market, but Royal Dutch Shell’s 5.5% yield is one of the best in the space.

I can understand investors who’d prefer to stick with the winner, and in the current environment, Conoco is outperforming its rivals.

At the same time, although investors should always remain diligent and continue to monitor each company going forward, I see nothing that changes my view of either ExxonMobil or Royal Dutch Shell. All three stocks are likely to be long-term winners and should be bought with confidence.

The article Should Poor Earnings From Big Oil Make Investors Panic? originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robert 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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