Behemoth Barking:

At one point about a decade ago, Exxon was the largest company on earth. Now it is the 15th largest market cap on the planet with a market cap of around $375B. It is roughly worth 100 billion more than the stock it is most compared to in CVX. Of course, both of these names dominate the composition of the XLE of 43% between them. But when examining their performance YTD there is a clear winner in XOM up 46%, nearly doubling that of CVX higher by 25% (they each pay a handsome dividend yield of about 4% too). Exxon’s recent drawdown was shallower than CVX as well and it now trades 15% off its most recent 52-week highs, while CVX is 20% off its annual peak. The ratio chart below shows that XOM has been outperforming CVX for more than 4 months. Many like to play the mean reversion game but I think stocks are strong for a reason and if one had to pick, place your capital with XOM. It has reset and it approaching the very round 90 figure which achieved its measured move to 105 almost perfectly after breaking above an ascending triangle in mid-May. A move above there sends it to par relatively quickly.

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