Better Buy: Magellan Midstream Partners vs. ExxonMobil

Energy industry giant ExxonMobil (NYSE: XOM) offers an enticing 8.5% yield, but midstream-focused Magellan Midstream Partners' (NYSE: MMP) yield is an even higher 10%. If you are looking at the out-of-favor energy sector for income opportunities, these two historically conservative players are worth a closer look. Both are dealing with a delicate business environment, but one of these names appears to be in a better position than the other.

Exxon is one of the largest energy companies on Earth, with a diversified portfolio that runs all the way from the upstream (oil and natural gas drilling) to the downstream (chemicals and refining) segments of the industry. Historically that's provided a fair amount of balance to its business, with downstream operations usually benefiting from low oil prices that can put pressure on the upstream side of its business. However, both sides are under material strain today because of the supply/demand imbalance caused by the worldwide COVID-19-related economic shutdowns. To put it simply, Exxon is suffering.

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Source Fool.com