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Energy ETFs to Surge After Exxon, Chevron Strong Q3 Results
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Energy sector results have been very strong with total Q3 earnings from 89.1% of the sector’s total market cap in the S&P 500 Index up 97.1% from the same period last year on 20.2% higher revenues. While 78.3% beat EPS estimates, 73.9% surpassed revenue estimates.
In particular, the two U.S. supermajor oil producers — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — delivered their strongest third-quarter results in four years, beating both earnings and revenue estimates, thanks to higher oil price and surge in production. Crude was up 44% year over year in the third quarter and production increased in double-digits in the Permian Basin, the shale region in Texas and New Mexico, that propelled total U.S. oil output to an all-time high (read: Higher Oil Prices to Spell Trouble for These Country ETFs).
Earnings in Focus
The largest U.S. oil company, Exxon Mobil, reported earnings per share of $1.46, beating the Zacks Consensus Estimate of $1.21 and improving from the year-ago earnings of 93 cents. Revenues climbed 25.4% year over year to $76.6 billion and edged past the estimated figure of $72.45 billion.
Chevron, which trails Exxon Mobil, topped earnings per share by 5 cents. Earnings per share of $2.11 were also higher than $1.03 earned in the year-ago period. Revenues rose 21.5% year over year to $44 billion and outpaced the estimated $42.8 billion.
Both the stocks gained following strong quarterly results with XOM gaining 1.6% and CVX climbing 3.2%. Exxon carries a Zacks Rank #2 (Buy) and a VGM Score of B, while Chevron has a Zacks Rank #3 (Hold) and a VGM Score of A. The duo belongs to a top-ranked Zacks industry (top 10%). This suggests smooth trading for the stocks in the days ahead.
ETFs in Focus
Given this, investors might want to tap energy ETFs having the largest allocation to these behemoths. Below we have highlighted some of them in detail (see: all the energy ETFs here).
This is the largest and most popular ETF in the energy space with AUM of $15.6 billion and average daily volume of around 14.4 million shares per day. Expense ratio comes in at 0.13%. The fund follows the Energy Select Sector Index and holds 30 securities in its basket. XOM and CVX occupy the top two spots with 24.4% and 16.5% share, respectively. XLE has a Zacks ETF Rank #2 with a High risk outlook.
This ETF tracks the Dow Jones U.S. Oil & Gas Index, giving investors exposure to the broad energy space. It holds 69 stocks in its basket with AUM of $913.8 million and average daily volume of about 580,000 shares. The product charges 43 bps in fees per year from investors. Exxon Mobil and Chevron occupy the top two positions in the basket, taking the bigger chunk of assets at 23.2% and 14.5%, respectively. The product has a Zacks ETF Rank #3 with a High risk outlook.
This fund manages about $3.8 billion in asset base and provides exposure to a basket of 139 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. The product sees a good volume of about 243,000 shares and charges 10 bps in annual fees. Here again, Exxon and Chevron are the top firms with 20.9% and 13.6% allocation, respectively. VDE carries a Zacks ETF Rank #2 with a High risk outlook (read: Winning ETF Strategies for the Fourth Quarter).
The fund follows the MSCI USA IMI Energy Index, holding 134 stocks in its basket. Out of these, XOM and CVX take the top two spots at 22.7% and 14.3%, respectively. The product charges 8 bps in annual fees and trades in a good volume of around 291,000 shares. It has accumulated $519.6 million in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.
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Energy ETFs to Surge After Exxon, Chevron Strong Q3 Results
Energy sector results have been very strong with total Q3 earnings from 89.1% of the sector’s total market cap in the S&P 500 Index up 97.1% from the same period last year on 20.2% higher revenues. While 78.3% beat EPS estimates, 73.9% surpassed revenue estimates.
In particular, the two U.S. supermajor oil producers — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — delivered their strongest third-quarter results in four years, beating both earnings and revenue estimates, thanks to higher oil price and surge in production. Crude was up 44% year over year in the third quarter and production increased in double-digits in the Permian Basin, the shale region in Texas and New Mexico, that propelled total U.S. oil output to an all-time high (read: Higher Oil Prices to Spell Trouble for These Country ETFs).
Earnings in Focus
The largest U.S. oil company, Exxon Mobil, reported earnings per share of $1.46, beating the Zacks Consensus Estimate of $1.21 and improving from the year-ago earnings of 93 cents. Revenues climbed 25.4% year over year to $76.6 billion and edged past the estimated figure of $72.45 billion.
Chevron, which trails Exxon Mobil, topped earnings per share by 5 cents. Earnings per share of $2.11 were also higher than $1.03 earned in the year-ago period. Revenues rose 21.5% year over year to $44 billion and outpaced the estimated $42.8 billion.
Both the stocks gained following strong quarterly results with XOM gaining 1.6% and CVX climbing 3.2%. Exxon carries a Zacks Rank #2 (Buy) and a VGM Score of B, while Chevron has a Zacks Rank #3 (Hold) and a VGM Score of A. The duo belongs to a top-ranked Zacks industry (top 10%). This suggests smooth trading for the stocks in the days ahead.
ETFs in Focus
Given this, investors might want to tap energy ETFs having the largest allocation to these behemoths. Below we have highlighted some of them in detail (see: all the energy ETFs here).
Energy Select Sector SPDR (XLE - Free Report)
This is the largest and most popular ETF in the energy space with AUM of $15.6 billion and average daily volume of around 14.4 million shares per day. Expense ratio comes in at 0.13%. The fund follows the Energy Select Sector Index and holds 30 securities in its basket. XOM and CVX occupy the top two spots with 24.4% and 16.5% share, respectively. XLE has a Zacks ETF Rank #2 with a High risk outlook.
iShares U.S. Energy ETF (IYE - Free Report)
This ETF tracks the Dow Jones U.S. Oil & Gas Index, giving investors exposure to the broad energy space. It holds 69 stocks in its basket with AUM of $913.8 million and average daily volume of about 580,000 shares. The product charges 43 bps in fees per year from investors. Exxon Mobil and Chevron occupy the top two positions in the basket, taking the bigger chunk of assets at 23.2% and 14.5%, respectively. The product has a Zacks ETF Rank #3 with a High risk outlook.
Vanguard Energy ETF (VDE - Free Report)
This fund manages about $3.8 billion in asset base and provides exposure to a basket of 139 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. The product sees a good volume of about 243,000 shares and charges 10 bps in annual fees. Here again, Exxon and Chevron are the top firms with 20.9% and 13.6% allocation, respectively. VDE carries a Zacks ETF Rank #2 with a High risk outlook (read: Winning ETF Strategies for the Fourth Quarter).
Fidelity MSCI Energy Index ETF (FENY - Free Report)
The fund follows the MSCI USA IMI Energy Index, holding 134 stocks in its basket. Out of these, XOM and CVX take the top two spots at 22.7% and 14.3%, respectively. The product charges 8 bps in annual fees and trades in a good volume of around 291,000 shares. It has accumulated $519.6 million in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>