Better Buy for Passive Income: Chevron vs. ExxonMobil
Key Points
On the one hand, Chevron's dividend yield is nearly 1% higher than ExxonMobil's.
Plus, Chevron has increased its annual dividend at a greater rate than ExxonMobil.
Yet, ExxonMobil's stock has outperformed Chevron's over the past five years.
- 10 stocks we like better than Chevron ›
It has been a good 2026 so far for many oil companies, with the conflict in the Middle East driving prices higher and lining the pockets of major companies. Big oil companies have traditionally been considered reliable dividend payers, but with the wave of extra cash that they've seen coming in this year, you can bet they'll get more shareholder-friendly.
Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM), the two largest American oil companies, have long been the standard for big oil dividend payers. But if you're looking for a stock to invest in for passive income, which one is the go-to? For most investors, it's likely Chevron. Here's why.
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How their businesses differ
Both Chevron and ExxonMobil are fully integrated oil and gas companies that operate in all phases of the value chain (upstream, midstream, and downstream). The difference is what they primarily focus on.
Chevron operates more in the upstream segment, drilling and extracting oil. ExxonMobil has a much larger downstream presence, refining crude oil into refined products such as gasoline and plastics. ExxonMobil's business is larger and more diversified than Chevron's, but Chevron is known for its leaner, more efficient operations.
Why Chevron stands out for income right now
If you're focused on maximizing your passive income right now, Chevron is the better choice. At the time of writing, Chevron's dividend yield is 3.7% compared to ExxonMobil's 2.7%. Dividend yields inevitably fluctuate, but Chevron has routinely maintained a higher yield than ExxonMobil.
In the dividend world, a 1% difference in yield is more significant than it may look on paper, especially as your total investment grows. In this case, it's the difference between a $10,000 investment paying out $370 versus $270 annually.
CVX Dividend Yield data by YCharts
Chevron also has the upper hand in increasing its dividend over time. Below is how much it has increased its dividend over different years compared to ExxonMobil:
| Company | Increase Over 3 Years | Increase Over 5 Years | Increase Over 10 Years |
|---|---|---|---|
| Chevron | 17.9% | 32.8% | 66.4% |
| ExxonMobil | 13.2% | 18.4% | 37.3% |
Data source: YCharts.
A current high yield is great, but owning a dividend stock that consistently increases its payout is even better. It adds to the compound effect with no extra work needed.
How ExxonMobil stands out
ExxonMobil has a long track record of dividend increases, with 43 consecutive years under its belt compared to Chevron's 39 years. Both are admirable and not stopping anytime soon, but ExxonMobil's is longer nonetheless.
Although Chevron offers a higher yield, ExxonMobil would be a good go-to if you prefer a stock with stronger overall growth opportunities. Over the past five years, ExxonMobil's total returns have been 218% compared to Chevron's 125%. That said, if your goal is passive income, Chevron is the better option of the two right now.
Should you buy stock in Chevron right now?
Before you buy stock in Chevron, consider this:
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
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