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Energy ETFs to Bet on Solid Q1 Earnings From Exxon, Chevron
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Exxon Mobil Corp. (XOM - Free Report) and Chevron Corp. (CVX - Free Report) are reaping profits not seen since 2008. Both the oil majors collectively posted $18 billion in first-quarter profits, showing resilience even as oil and natural gas prices declined. In fact, Exxon Mobil reported its best-ever start to a year. However, both companies saw their revenues decline from a year-ago quarter (read: Energy ETFs Rally as Oil Prices Soar).
Solid earnings set the stage for energy ETFs, especially those with the largest allocation to the energy behemoths, to rally. These include Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) , Vanguard Energy ETF (VDE - Free Report) , Fidelity MSCI Energy Index ETF (FENY - Free Report) and Strive U.S. Energy ETF (DRLL - Free Report) .
Earnings in Focus
The largest U.S. oil producer Exxon Mobil posted record first-quarter profits thanks in part to a ramp-up in production and the ongoing cost cuts. Earnings per share came in at $2.83, surpassing the Zacks Consensus Estimate of $2.65 and improving from the year-ago earnings of $2.07. Revenues dipped 4.4% year over year to $86.56 billion and edged past the estimated figure of $96 billion.
Earnings per share at Chevron came in at $3.55, beating the Zacks Consensus Estimate by 19 cents but improving from the year-ago earnings of $3.36 per share. Revenues declined 6.6% year over year to $50.8 billion but edged past the consensus mark of $47.9 billion.
With the latest earnings beat, both the energy superpowers posted hefty profits for four consecutive quarters even as international crude prices slid more than 35% from last year’s peak. Exxon earned more than $10 billion a quarter during that span while Chevron’s average was close to $9 billion — something neither company had done since at least 2008, when crude reached $147.50.
Energy Select Sector SPDR is the largest and the most popular ETF in the energy space, with AUM of $38.4 billion and an average daily volume of 20.5 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 23 securities in its basket, with Exxon Mobil and Chevron occupying the top two spots with 24.3% and a 19.8% share, respectively (read: ETFs to Play on Surprise Output Cut Decision By OPEC+).
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Energy ETF provides exposure to a basket of 112 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Here again, Exxon and Chevron are the two leading firms with a 22.5% and 16.1% allocation, respectively.
Vanguard Energy ETF has amassed $7.8 billion in its asset base and sees a good volume of about 512,000 shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
iShares U.S. Energy ETF tracks the Russell 1000 Energy RIC 22.5/45 Capped Gross Index (USD), giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 42 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 24.1% and 16.4% share, respectively (see: all the Energy ETFs here).
iShares U.S. Energy ETF charges 39 bps in fees per year from its investors. It has AUM of $1.6 billion and an average daily volume of about 500,000 shares. The product has a Zacks ETF Rank #3 with a High risk outlook.
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 124 stocks in its basket. Of these, XOM and CVX take the top two spots at 22.5% and 16.1%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 785,000 shares. It has accumulated $1.5 billion in its asset base and has a Zacks ETF Rank #2 with a High risk outlook.
Strive U.S. Energy ETF seeks broad market exposure to the U.S. energy sector and follows the Solactive United States Energy Regulated Capped Index. It holds 62 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 23.8% and 16% share, respectively.
Strive U.S. Energy ETF has gathered $350.5 million in its asset base since its inception last August. It charges 41 bps in fees per year from investors and trades in an average daily volume of 63,000 shares.
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Energy ETFs to Bet on Solid Q1 Earnings From Exxon, Chevron
Exxon Mobil Corp. (XOM - Free Report) and Chevron Corp. (CVX - Free Report) are reaping profits not seen since 2008. Both the oil majors collectively posted $18 billion in first-quarter profits, showing resilience even as oil and natural gas prices declined. In fact, Exxon Mobil reported its best-ever start to a year. However, both companies saw their revenues decline from a year-ago quarter (read: Energy ETFs Rally as Oil Prices Soar).
Solid earnings set the stage for energy ETFs, especially those with the largest allocation to the energy behemoths, to rally. These include Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) , Vanguard Energy ETF (VDE - Free Report) , Fidelity MSCI Energy Index ETF (FENY - Free Report) and Strive U.S. Energy ETF (DRLL - Free Report) .
Earnings in Focus
The largest U.S. oil producer Exxon Mobil posted record first-quarter profits thanks in part to a ramp-up in production and the ongoing cost cuts. Earnings per share came in at $2.83, surpassing the Zacks Consensus Estimate of $2.65 and improving from the year-ago earnings of $2.07. Revenues dipped 4.4% year over year to $86.56 billion and edged past the estimated figure of $96 billion.
Earnings per share at Chevron came in at $3.55, beating the Zacks Consensus Estimate by 19 cents but improving from the year-ago earnings of $3.36 per share. Revenues declined 6.6% year over year to $50.8 billion but edged past the consensus mark of $47.9 billion.
With the latest earnings beat, both the energy superpowers posted hefty profits for four consecutive quarters even as international crude prices slid more than 35% from last year’s peak. Exxon earned more than $10 billion a quarter during that span while Chevron’s average was close to $9 billion — something neither company had done since at least 2008, when crude reached $147.50.
ETFs in Focus
Energy Select Sector SPDR (XLE - Free Report)
Energy Select Sector SPDR is the largest and the most popular ETF in the energy space, with AUM of $38.4 billion and an average daily volume of 20.5 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 23 securities in its basket, with Exxon Mobil and Chevron occupying the top two spots with 24.3% and a 19.8% share, respectively (read: ETFs to Play on Surprise Output Cut Decision By OPEC+).
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Energy ETF (VDE - Free Report)
Vanguard Energy ETF provides exposure to a basket of 112 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Here again, Exxon and Chevron are the two leading firms with a 22.5% and 16.1% allocation, respectively.
Vanguard Energy ETF has amassed $7.8 billion in its asset base and sees a good volume of about 512,000 shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
iShares U.S. Energy ETF (IYE - Free Report)
iShares U.S. Energy ETF tracks the Russell 1000 Energy RIC 22.5/45 Capped Gross Index (USD), giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 42 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 24.1% and 16.4% share, respectively (see: all the Energy ETFs here).
iShares U.S. Energy ETF charges 39 bps in fees per year from its investors. It has AUM of $1.6 billion and an average daily volume of about 500,000 shares. The product has a Zacks ETF Rank #3 with a High risk outlook.
Fidelity MSCI Energy Index ETF (FENY - Free Report)
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 124 stocks in its basket. Of these, XOM and CVX take the top two spots at 22.5% and 16.1%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 785,000 shares. It has accumulated $1.5 billion in its asset base and has a Zacks ETF Rank #2 with a High risk outlook.
Strive U.S. Energy ETF (DRLL - Free Report)
Strive U.S. Energy ETF seeks broad market exposure to the U.S. energy sector and follows the Solactive United States Energy Regulated Capped Index. It holds 62 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 23.8% and 16% share, respectively.
Strive U.S. Energy ETF has gathered $350.5 million in its asset base since its inception last August. It charges 41 bps in fees per year from investors and trades in an average daily volume of 63,000 shares.