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Energy ETFs to Dig on Record Q2 Earnings From Exxon, Chevron
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The energy sector has been the top performer this year, buoyed by higher oil prices. Supply disruptions and unprecedented demand are the major catalysts. The solid trend is likely to continue with the two big oil giants — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — posting better-than-expected earnings results.
This is especially true as both Exxon Mobil and Chevron logged in the biggest-ever quarterly profit for the second quarter. Additionally, both companies posted record quarterly revenues though Exxon lagged the revenue estimates. Driven by big profits, shares of XOM and CVX climbed 4.6% and 8.9%, respectively (read: ETF Areas to Win/Lose on Falling Biden's Approval Ratings).
The solid trading is expected to provide fuel to 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.
Earnings in Focus
The largest U.S. oil producer Exxon Mobil reported earnings per share of $4.14, surpassing the Zacks Consensus Estimate of $2.25 and more than three-fold from the year-ago earnings of $1.10. Revenues jumped 70% year over year to $115.68 billion but fell shy of the estimated figure of $118 billion. Exxon aims to repurchase $30 billion of shares through 2022 and 2023.
Earnings per share at Chevron came in at $5.82, beating the Zacks Consensus Estimate by a wide margin of 80 cents and surging 240% year over year. Revenues spiked 83% year over year to $68.7 billion and edged past the consensus mark of $55.8 billion. Chevron boosted its annual buyback plans to a range of $10-$15 billion, up from $5-$10 billion.
Energy Select Sector SPDR is the largest and the most-popular ETF in the energy space, with AUM of $35.5 billion and an average daily volume of 31 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 23.5% and 22% share, respectively.
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (see: all the Energy ETFs here).
Vanguard Energy ETF provides exposure to a basket of 109 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 21.8% and 16.8% allocation, respectively.
Vanguard Energy ETF has amassed $7.3 billion in its asset base and sees a good volume of about 1.2 million shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #1 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 42 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions in the basket at 21.5% and 17% share, respectively.
iShares U.S. Energy ETF charges 41 bps in fees per year from its investors. It has AUM of $2 billion and an average daily volume of about 2 million shares. The product has a Zacks ETF Rank #1 with a High risk outlook.
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 21.7% and 16.7%, respectively (read: How Buffett Stocks Beat S&P 500: ETF Strategies to Follow).
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 1.5 million shares. It has accumulated $1.4 billion in its asset base and has a Zacks ETF Rank #1 with a High risk outlook.
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Energy ETFs to Dig on Record Q2 Earnings From Exxon, Chevron
The energy sector has been the top performer this year, buoyed by higher oil prices. Supply disruptions and unprecedented demand are the major catalysts. The solid trend is likely to continue with the two big oil giants — Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) — posting better-than-expected earnings results.
This is especially true as both Exxon Mobil and Chevron logged in the biggest-ever quarterly profit for the second quarter. Additionally, both companies posted record quarterly revenues though Exxon lagged the revenue estimates. Driven by big profits, shares of XOM and CVX climbed 4.6% and 8.9%, respectively (read: ETF Areas to Win/Lose on Falling Biden's Approval Ratings).
The solid trading is expected to provide fuel to 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.
Earnings in Focus
The largest U.S. oil producer Exxon Mobil reported earnings per share of $4.14, surpassing the Zacks Consensus Estimate of $2.25 and more than three-fold from the year-ago earnings of $1.10. Revenues jumped 70% year over year to $115.68 billion but fell shy of the estimated figure of $118 billion. Exxon aims to repurchase $30 billion of shares through 2022 and 2023.
Earnings per share at Chevron came in at $5.82, beating the Zacks Consensus Estimate by a wide margin of 80 cents and surging 240% year over year. Revenues spiked 83% year over year to $68.7 billion and edged past the consensus mark of $55.8 billion. Chevron boosted its annual buyback plans to a range of $10-$15 billion, up from $5-$10 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 $35.5 billion and an average daily volume of 31 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 23.5% and 22% share, respectively.
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #1 (Strong 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 109 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 21.8% and 16.8% allocation, respectively.
Vanguard Energy ETF has amassed $7.3 billion in its asset base and sees a good volume of about 1.2 million shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #1 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 42 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions in the basket at 21.5% and 17% share, respectively.
iShares U.S. Energy ETF charges 41 bps in fees per year from its investors. It has AUM of $2 billion and an average daily volume of about 2 million shares. The product has a Zacks ETF Rank #1 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 107 stocks in its basket. Of these, XOM and CVX take the top two spots at 21.7% and 16.7%, respectively (read: How Buffett Stocks Beat S&P 500: ETF Strategies to Follow).
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 1.5 million shares. It has accumulated $1.4 billion in its asset base and has a Zacks ETF Rank #1 with a High risk outlook.