Which Oil and Gas Investment Companies Offer the Best Value? XOM vs CVX vs EOG

The Middle East geopolitical tensions, combined with OPEC+ supply management and China’s economic stimulus measures, have created a compelling backdrop for energy sector investors. Crude oil prices have surged, and market participants are reassessing exposure to major oil and gas investment companies. Three stocks dominate the conversation among Wall Street analysts: Exxon Mobil, Chevron, and EOG Resources. Here’s how these firms stack up on fundamentals and growth prospects.

Assessing Exxon Mobil’s Earnings Trajectory

Exxon Mobil recently signaled sequential improvement in profitability, riding higher energy prices and refining margins into the third quarter. The company will disclose Q3 2023 results on October 27, with Street consensus calling for adjusted EPS of $2.35—a notable step-down from last year’s $4.45 but an improvement from Q2 2023’s $1.94. This decline reflects commodity price normalization compared to the elevated oil market during the Russia-Ukraine conflict.

Looking further ahead, Exxon is targeting aggressive growth. The firm projects doubling its earnings and cash generation capacity by 2027 relative to 2019 levels, anchored by Permian and Guyana production ramps. Capital expenditure guidance of $20-$25 billion annually through 2027 underscores management’s commitment, with roughly $17 billion directed toward low-carbon transition projects.

Goldman Sachs’ Neil Mehta struck a cautious tone recently, estimating Q3 EPS closer to $2.30 and maintaining a Hold rating at a $116 price target, citing extended valuation multiples after the stock’s multi-year run. Despite his hesitancy, the broader Street consensus tilts toward optimism: nine Buy ratings against seven Holds push XOM to a Moderate Buy. The collective price target of $126.88 suggests 14.4% upside, while the 3.3% dividend yield provides near-term income.

Chevron’s Earnings Reset and Commodity Rebound

Chevron’s trajectory tells a different story. After Q2’s $3.08 adjusted EPS, analysts expect Q3 results (due October 27) to reach $3.46—still compressed versus last year’s $5.56 but reflecting the quarter’s stronger energy pricing environment. The company has demonstrated operational resilience, maintaining balance sheet strength and signaling capacity to sustain dividends and capex even at a $50 Brent scenario.

Mizuho analyst Nitin Kumar elevated his price target to $215 from $209, reinforcing a Buy stance as Q3 commodity strength flows through the P&L. Kumar’s rationale centers on OPEC+ discipline, global undersupply dynamics, and tight product inventories fueling the rebound. CVX shares have softened 7% year-to-date despite these tailwinds, creating valuation opportunity.

Wall Street’s collective view leans bullish: eight Buys and five Holds support a Moderate Buy rating, with an average price target of $191.54 implying roughly 15% upside. The stock’s 3.6% dividend yield edges above Exxon’s, rewarding patient holders.

EOG Resources: Growth Profile and Shareholder Returns

EOG Resources operates differently from its mega-cap peers, running a disciplined, multi-basin exploration and production platform focused on high-return, low-cost reserve additions. The firm’s commitment to return 60% of free cash flow to shareholders distinguishes it; in Q2 2023, EOG generated $1.04 billion in operating cash flow, deploying $480 million toward dividends and $300 million toward repurchases.

Q3 results arrive November 3, with consensus expecting adjusted EPS of $2.85, marking recovery from Q2’s $2.49 but modestly below last year’s $3.71. JPMorgan’s Arun Jayaram recently raised his price target to $156 from $145, anchoring his Buy rating on anticipated free cash flow outperformance, a mooted $1 special dividend, and technical updates on the Utica asset. Jayaram flagged expectations for “accelerated” Q4 2023 production.

The analyst community is decidedly constructive: 14 Buy recommendations against four Holds underscore confidence. The average target of $149.80 projects 18% upside—the highest among the three. Even accounting for its 2.6% regular dividend yield (lower than peers), total return potential edges higher, reflecting growth visibility and shareholder-friendly capital allocation.

The Bottom Line for Energy Investors

Street sentiment ranks these oil and gas investment companies on a spectrum. EOG Resources commands the most bullish positioning, supported by growth catalysts and shareholder-friendly policies. Chevron occupies the middle ground with steady fundamentals and an attractive valuation. Exxon Mobil, despite its scale, faces valuation headwinds following years of outperformance, though long-cycle projects offer lasting appeal.

For investors balancing income and capital appreciation, EOG’s capital return mechanism and expected production growth suggest the most comprehensive return profile across this cohort.