Jim Cramer highlighted Chevron Corporation (NYSE:CVX) and Enbridge Inc. (NYSE:ENB) as two energy stocks suited to different priorities, as he said during the September 28 episode of Mad Money:
Let’s go back… to the idea of what can work in an environment when oil’s up, interest rates are up, and therefore stocks tend to go down like they did today. You have to see what companies have, that they need demand, they need pricing power, and they need scale. If they have all three, they won’t be as impacted by higher interest rates courtesy of the war with Iran… The oil complex represents the only stocks that are truly in demand.
Chevron is the king with great offshore, terrific Venezuela, amazing Asia and Mediterranean, and extraordinary Permian assets. Best balance sheet, too. Okay, so you got that. You want yield? It’s Enbridge with a 6% yield. They bring in all oil from Canada. The President would be unwise to ban Canadian oil, although his disdain for Canada seems to know no bounds so who knows?… That concern helps explain why Enbridge has such a big yield.
Cramer has been bullish on CVX elsewhere, saying the stock can give you “great returns.” Here’s why he added Chevron (CVX) to his Fantasy Portfolio as the final kicker.
Chevron and Enbridge Show Different Energy Strengths
Chevron Corporation reported $11.977 billion in adjusted earnings and $15.433 billion in adjusted free cash flow in the second quarter. Worldwide production increased 20% year over year to 4.07 million barrels of oil equivalent per day, while net debt-to-CFFO was 0.6 times. The company is also expanding in Venezuela. On September 2, it announced agreements covering its Venezuelan joint ventures, which plan to invest more than $7 billion over five years, with production targeted to more than double to approximately 600,000 barrels per day. CEO Mike Wirth said the expanded position reflects Chevron’s “confidence in the country’s deep resource potential.”
Meanwhile, Enbridge Inc. reported C$4.776 billion of adjusted EBITDA and C$2.948 billion of distributable cash flow in the second quarter. The company reaffirmed 2026 adjusted EBITDA guidance of C$20.2 billion to C$20.8 billion and distributable cash flow per share of C$5.70 to C$6.10. It is also expanding its pipeline and energy infrastructure portfolio. On September 9, the company agreed to acquire Tallgrass Energy’s crude transportation business for approximately $2.55 billion. Enbridge subsequently completed a common-share offering on September 14, issuing 44.735 million shares for approximately C$3 billion in gross proceeds, with the proceeds intended in part to fund announced acquisitions.
When it comes to valuation, Enbridge Inc. trades at a higher forward PE compared to Chevron Corporation. The former trades at 20.37x forward earnings, while the latter trades at a multiple of 15.2. Both stocks trade above the broader energy sector median of 12.2x, although Enbridge commands the larger premium, reflecting the different earnings and cash-flow characteristics of its pipeline-heavy business. Notably, Enbridge’s 20.37x multiple even eclipses the broader S&P 500 range of 19.1x–19.4x.
Bear Case for Chevron and Enbridge
Chevron Corporation’s earnings remain sensitive to commodity prices because its upstream business generated $8.182 billion of second-quarter earnings. That creates a meaningful downside if oil prices weaken, especially as Cramer’s comment explicitly points to an environment of higher oil prices. Chevron’s Venezuela expansion also adds execution and geopolitical exposure.
Enbridge Inc.’s risk is more closely tied to its balance sheet and financing needs. Its rolling 12-month debt-to-EBITDA ratio was 5.1 times at the end of the second quarter, while higher depreciation and higher interest expense on incremental debt contributed to a C$36 million year-over-year decline in adjusted earnings. The company’s C$2.55 billion Tallgrass acquisition and subsequent C$3 billion equity offering also show that continued expansion requires substantial capital, which creates potential pressure from both financing costs and shareholder dilution.
Hedge Funds Cut Positions in Chevron and Enbridge
Insider Monkey, which tracks more than 1,000 hedge funds, showed 101 hedge fund holders of Chevron at the end of Q2, compared with 103 in Q1. Enbridge had 31 hedge fund holders in Q2, down from 37 in Q1. Short interest remains relatively limited for both stocks, with Chevron’s at roughly 1% of float and Enbridge’s at approximately 0.8%. Chevron and Enbridge offer different ways to play the energy market Cramer described. Chevron Corporation brings greater exposure to oil production and upstream earnings, while Enbridge Inc. combines its pipeline business with a high dividend yield but carries more balance-sheet pressure.
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