Better Buy: ExxonMobil vs. BP
The energy sector is deeply out of favor because of the economic shutdowns being used to slow the spread of the coronavirus. Muddling through isn't going to be easy, but both ExxonMobil (NYSE: XOM) and BP (NYSE: BP) should manage the feat. However, is one a better option for investors than the other? Here are some facts to consider before you make a final call.
Exxon's yield is a huge 9.4% today, easily at the high end of the company's historical yield range. It's a sign of just how hard things are right now in the energy sector, and, importantly, just how concerned investors are that Exxon will need to cut its dividend. That is a very real concern given that oil prices are painfully low right now and Exxon has been spending a lot of money on its exploration and development activities. The problem is that it can't just stop investing, because its production would start to decline.
Image source: Getty Images.
Source Fool.com
