Crude oil prices tumbled on Monday, with U.S. West Texas Intermediate (WTI) falling below $100 a barrel as signs of easing geopolitical tensions, including progress in U.S.–Iran diplomatic talks and a pause in U.S. military action, reduced fears of supply disruptions.
The developments prompted traders to unwind some of the geopolitical risk premium that had driven oil prices higher.
Consequently, energy giants Chevron CVX) and Exxon Mobil XOM) slipped more than 3% in Monday's trading session after reaching fresh 52-week highs following better-than-expected Q3 results last Friday, October 30.
With both stocks up nearly 50% year to date, benefiting from robust cash generation and shareholder returns, investors may be wondering whether the pullback presents a buying opportunity.
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Chevron's Strong Q3 Results
Chevron reported adjusted Q3 earnings of $5.28 per share, easily surpassing the Zacks Consensus Estimate of $4.78 by over 10% and nearly tripling EPS of $1.85 in the year-ago quarter. This came as quarterly revenue climbed 36% year over year to almost $68 billion and crushed expectations of $60.48 billion by 12%.
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Encouragingly, Chevron generated $12 billion in free cash flow, more than doubling the year-ago level as illustrated by the orange line in the quarterly chart below and highlighting its robust cash generation amid elevated crude oil prices.
Looking ahead, expanding operations in Venezuela, production growth in the Permian Basin, and its Hess acquisition provide favorable long-term growth opportunities.
Management also expects 2026 capital expenditures near the low end of its $18-$19 billion budget while maintaining quarterly share repurchases of $2.5-$3 billion.
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Exxon’s Strong Q3 Results Lead to a Dividend Increase
Exxon Mobil reported adjusted Q3 earnings of $4.23 per share, exceeding expectations of $3.90 by over 8% and more than doubling year-ago EPS of $1.88. Revenue surged 33% to $113.16 billion, also comfortably beating expectations of $102.98 billion by nearly 10%.
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More intriguingly, Exxon generated an impressive $19.1 billion in quarterly free cash flow, more than tripling from $6.33 billion in Q3 2025, supported by strong refining margins and production from Guyana and the Permian Basin.
Moving forward, Exxon continues to expand its LNG portfolio and has announced plans for another $20 billion in share repurchases during 2027, along with increasing its dividend by 4%.
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CVX vs. XOM: Valuation & Dividend Comparison
Chevron trades at roughly 13X forward earnings compared with 14X for Exxon Mobil, leaving both energy giants trading at attractive multiples relative to the broader market despite trading at premiums to their Zacks Oil and Gas-Integrated-International Industry average of 7X.
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Chevron also offers the more generous dividend yield at 3%, compared with Exxon's 2.2%. That said, as Dividend Aristocrats, both companies are established dividend growers, with Chevron increasing its annual payout for 39 consecutive years and Exxon extending its streak to 44 years.
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Bottom Line: Buy the Dip in CVX or XOM?
With Chevron and Exxon Mobil stocks both sporting a Zacks Rank #1 (Strong Buy), Monday's pullback could present an attractive buying opportunity for long-term investors, with it noteworthy that the Zacks Oil and Gas-Integrated-International Industry is currently in the top 3% of more than 240 Zacks industries.
Chevron offers a slightly more appealing valuation and higher dividend yield, while Exxon stands out for its larger free cash flow generation and extensive global growth opportunities. However, investors should remain mindful that further declines in crude prices could pressure earnings and create additional volatility for both stocks.
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Chevron Corporation (CVX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).