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Exxon, Chevron Lags Q1 Earnings, Up YoY: Energy ETFs in Focus
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The energy sector, which was the top performer this year, is lately seeing shaky trading. While persistent supply disruption continued to support the oil price, concerns over global slowdown and warnings of U.S. recession sparked worries over energy demand. Oil prices plunged to near $100 per barrel after hiting a high of more than $130 per barrel.
Mixed Q1 results from the two big oil giants — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — provided a solid entry point for investors as the outlook for the sector remains bright with ongoing supply constraints. As such, energy ETFs like Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) , Vanguard Energy ETF (VDE - Free Report) and Fidelity MSCI Energy Index ETF (FENY - Free Report) , with the largest allocation to the energy behemoths, are in focus.
Though both energy behemoths missed earnings estimates, Exxon's earnings tripled in the first quarter and Chevron posted its highest quarterly profit in 10 years. Additionally, both companies ramped up stock buybacks as oil prices surged. Exxon tripled its share repurchase program up to a total of $30 billion through 2023 and Chevron will repurchase a record $10 billion of stock before the end of this year (read: 5 ETFs to Bet on the Favorite Sectors of Q1 Earnings).
Earnings in Focus
The largest U.S. oil producer Exxon Mobil reported earnings per share of $2.07, lagging the Zacks Consensus Estimate of $2.25 but more than tripled from the year-ago earnings of 65 cents. Revenues jumped 53% year over year to $90.5 billion and edged past the estimated figure of $88.9 billion.
Chevron lagged the earnings per share estimate by 8 cents. Earnings of $3.36 were well above than the year-ago earnings of 90 cents. Revenues climbed 69.8% year over year to $54.4 billion and edged past the consensus mark of $47 billion.
Energy Select Sector SPDR is the largest and the most-popular ETF in the energy space, with AUM of $36 billion and an average daily volume of 39.4 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 21 securities in its basket, with Exxon Mobil and Chevron occupying the top two spots with 23.3% and 21% share, respectively.
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (see: all the Energy ETFs here).
Vanguard Energy ETF provides exposure to a basket of 103 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Here again, Exxon and Chevron are the two leading firms with19.5% and 17.5% allocation , respectively.
Vanguard Energy ETF has amassed $8 billion in its asset base and sees a good volume of about 1.8 million shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a High risk outlook.
iShares U.S. Energy ETF tracks the Dow Jones U.S. Oil & Gas Index, giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 37 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions in the basket at 19.9% and 16.8% share, respectively.
iShares U.S. Energy ETF charges 41 bps in fees per year from its investors. It has AUM of $3.6 billion and an average daily volume of about 3.7 million shares. The product has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 107 stocks in its basket. Of these, XOM and CVX take the top two spots at 19.5% and 17.4%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 2.2 million shares. It has accumulated $1.5 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.
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Exxon, Chevron Lags Q1 Earnings, Up YoY: Energy ETFs in Focus
The energy sector, which was the top performer this year, is lately seeing shaky trading. While persistent supply disruption continued to support the oil price, concerns over global slowdown and warnings of U.S. recession sparked worries over energy demand. Oil prices plunged to near $100 per barrel after hiting a high of more than $130 per barrel.
Mixed Q1 results from the two big oil giants — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — provided a solid entry point for investors as the outlook for the sector remains bright with ongoing supply constraints. As such, energy ETFs like Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) , Vanguard Energy ETF (VDE - Free Report) and Fidelity MSCI Energy Index ETF (FENY - Free Report) , with the largest allocation to the energy behemoths, are in focus.
Though both energy behemoths missed earnings estimates, Exxon's earnings tripled in the first quarter and Chevron posted its highest quarterly profit in 10 years. Additionally, both companies ramped up stock buybacks as oil prices surged. Exxon tripled its share repurchase program up to a total of $30 billion through 2023 and Chevron will repurchase a record $10 billion of stock before the end of this year (read: 5 ETFs to Bet on the Favorite Sectors of Q1 Earnings).
Earnings in Focus
The largest U.S. oil producer Exxon Mobil reported earnings per share of $2.07, lagging the Zacks Consensus Estimate of $2.25 but more than tripled from the year-ago earnings of 65 cents. Revenues jumped 53% year over year to $90.5 billion and edged past the estimated figure of $88.9 billion.
Chevron lagged the earnings per share estimate by 8 cents. Earnings of $3.36 were well above than the year-ago earnings of 90 cents. Revenues climbed 69.8% year over year to $54.4 billion and edged past the consensus mark of $47 billion.
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 $36 billion and an average daily volume of 39.4 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 21 securities in its basket, with Exxon Mobil and Chevron occupying the top two spots with 23.3% and 21% share, respectively.
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (see: all the Energy ETFs here).
Vanguard Energy ETF (VDE - Free Report)
Vanguard Energy ETF provides exposure to a basket of 103 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Here again, Exxon and Chevron are the two leading firms with19.5% and 17.5% allocation , respectively.
Vanguard Energy ETF has amassed $8 billion in its asset base and sees a good volume of about 1.8 million shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a High risk outlook.
iShares U.S. Energy ETF (IYE - Free Report)
iShares U.S. Energy ETF tracks the Dow Jones U.S. Oil & Gas Index, giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 37 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions in the basket at 19.9% and 16.8% share, respectively.
iShares U.S. Energy ETF charges 41 bps in fees per year from its investors. It has AUM of $3.6 billion and an average daily volume of about 3.7 million shares. The product has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Fidelity MSCI Energy Index ETF (FENY - Free Report)
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 107 stocks in its basket. Of these, XOM and CVX take the top two spots at 19.5% and 17.4%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 2.2 million shares. It has accumulated $1.5 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.