In the energy sector, ExxonMobil (XOM) and Chevron (CVX) are the two largest dividend-paying stocks, both having demonstrated their business resilience through multiple oil price cycles. Although the recent surge in oil prices directly benefits both companies’ free cash flow, their true investment value lies in the proven safety of their dividends even when oil prices were far below current levels.
WTI crude oil prices have sharply climbed from $66.96 per barrel on February 27 to an actual $100 per barrel today (currently priced at $99, fluctuating daily). This upward trend has directly generated substantial free cash flow for both companies.
ExxonMobil has increased its annual dividend for 43 consecutive years. Its current quarterly dividend is $1.03 per share, translating to a dividend yield of 2.64% based on the current stock price of $156. The company’s dividend coverage ratio is very healthy. For the full year 2025, operating cash flow reached $52 billion, while dividend payments totaled $17.2 billion, meaning operating cash flow alone could cover dividend requirements approximately three times over. Even under the extreme stress test of the 2020 oil price collapse, when the company reported a net loss of $22 billion, ExxonMobil still maintained its dividend payments.
Production growth is a structural catalyst for ExxonMobil. In 2025, the company achieved a record-breaking daily production of 4.7 million barrels of oil equivalent, the highest in over 40 years, with production from the Permian Basin alone reaching 1.8 million barrels per day in the fourth quarter. Simultaneously, the company has achieved cumulative structural cost savings of $15.1 billion since 2019, aiming to save $20 billion by 2030. This cost base ensures strong dividend resilience even during periods of lower oil prices, not just at current high price levels.
Regarding financial performance, ExxonMobil reported fourth-quarter 2025 earnings per share of $1.71, surpassing the market expectation of $1.66. Additionally, the company repurchased $20 billion in stock during 2025 and plans another $20 billion in buybacks for 2026.
Chevron offers a higher dividend yield of 3.6%, compared to ExxonMobil’s 2.6%. The company increased its quarterly dividend to $1.78 per share in the first quarter of 2026, extending its record of annual dividend increases to 39 consecutive years. For the full year 2025, Chevron generated a record $16.6 billion in free cash flow and returned $27.01 billion to shareholders. Its global production increased by 12% year-over-year, reaching a historic high of 3.723 million barrels of oil equivalent per day. Both stocks have gained approximately 30% since the start of this year. Both companies have successfully navigated multiple oil price downturns, including the 2020 crash, while maintaining their dividend growth.
As one of the world’s largest oil companies, Chevron’s integrated business model extends its reach across various aspects of the oil industry, making its stock a subject of widespread attention.
Looking ahead, Chevron forecasts a compound annual growth rate in production of approximately 6% from 2024 to 2026, assuming an average Brent crude oil price of $70 per barrel. This, in turn, is expected to boost free cash flow growth. Considering only its Permian Basin assets, management projects free cash flow to increase by approximately $2 billion by 2026. Management believes that production growth will help enhance profitability. Although Chevron’s adjusted return on capital employed was 7.2% in 2025, management aims to increase this metric by 3 percentage points or more by 2030, based on the same assumption of $70 Brent crude. Also predicated on this oil price assumption, Chevron anticipates further growth in free cash flow in the future.
Listed on the New York Stock Exchange for over a century, Chevron is currently the only energy stock in the Dow Jones Industrial Average. With a 39-year record of consecutive dividend increases, its dividend is poised to continue growing in the future.
