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Energy ETFs in Focus Post Exxon, Chevron Q3 Earnings Miss
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The energy sector has shown strong momentum in recent months, buoyed by a rise in oil price, thanks to tightening supply conditions, the Middle East conflict and the prospect of higher demand.
Two energy behemoths — Exxon Mobil Corp. (XOM - Free Report) and Chevron Corp. (CVX - Free Report) — reported worse-than-expected third-quarter earnings. Both companies saw quarterly profit decline of more than 40% from the year-ago quarter. However, their profit increased from the second quarter, as oil prices rose and fuel production increased this summer.
This has put focus on energy ETFs like Energy Select Sector SPDR (XLE - Free Report) , Vanguard Energy ETF (VDE - Free Report) , iShares U.S. Energy ETF (IYE), Fidelity MSCI Energy Index ETF (FENY - Free Report) and Strive U.S. Energy ETF (DRLL - Free Report) , with the largest allocation to the energy behemoths.
Earnings in Focus
The largest U.S. oil producer, Exxon Mobil posted earnings per share of $2.27, missing the Zacks Consensus Estimate of $2.36 and lower than the year-ago earnings of $4.45. Revenues dropped 19% year over year to $90.76 billion but edged past the estimated figure of $89.29 billion (read: ETFs to Benefit From the Historic Exxon-Pioneer Oil Merger).
Earnings per share at Chevron came in at $3.05, missing the Zacks Consensus Estimate of $3.68 and declining from the year-ago earnings of $5.56 per share. Revenues declined 18.9% year over year to $54.1 billion and outpaced the consensus mark of $54 billion.
Energy Select Sector SPDR is the largest and the most popular ETF in the energy space, with AUM of $39 billion and an average daily volume of 21 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 22.5% and a 17% 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.
Vanguard Energy ETF provides exposure to a basket of 110 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 23.2% and 15% allocation, respectively (read: Guide to Energy Equities ETF Investing).
Vanguard Energy ETF has amassed $8.4 billion in its asset base. It sees a good volume of about 536,000 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)
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 40 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 22.1% and 13.7% share, respectively.
iShares U.S. Energy ETF charges 40 bps in fees per year from its investors. It has AUM of $1.3 billion and an average daily volume of about 505,000 shares. The product has a Zacks ETF Rank #2 with a High risk outlook.
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 120 stocks in its basket. Of these, XOM and CVX take the top two spots at 23.3% and 15.0%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 583,000 shares. It has accumulated $1.6 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook (see: all the Energy ETFs here).
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 21.3% and 13.9% share, respectively.
Strive U.S. Energy ETF has gathered $353.2 million in its asset base. It charges 41 bps in fees per year from investors and trades in an average daily volume of 37,000 shares. DRLL has a Zacks ETF Rank #2.
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Energy ETFs in Focus Post Exxon, Chevron Q3 Earnings Miss
The energy sector has shown strong momentum in recent months, buoyed by a rise in oil price, thanks to tightening supply conditions, the Middle East conflict and the prospect of higher demand.
Two energy behemoths — Exxon Mobil Corp. (XOM - Free Report) and Chevron Corp. (CVX - Free Report) — reported worse-than-expected third-quarter earnings. Both companies saw quarterly profit decline of more than 40% from the year-ago quarter. However, their profit increased from the second quarter, as oil prices rose and fuel production increased this summer.
This has put focus on energy ETFs like Energy Select Sector SPDR (XLE - Free Report) , Vanguard Energy ETF (VDE - Free Report) , iShares U.S. Energy ETF (IYE), Fidelity MSCI Energy Index ETF (FENY - Free Report) and Strive U.S. Energy ETF (DRLL - Free Report) , with the largest allocation to the energy behemoths.
Earnings in Focus
The largest U.S. oil producer, Exxon Mobil posted earnings per share of $2.27, missing the Zacks Consensus Estimate of $2.36 and lower than the year-ago earnings of $4.45. Revenues dropped 19% year over year to $90.76 billion but edged past the estimated figure of $89.29 billion (read: ETFs to Benefit From the Historic Exxon-Pioneer Oil Merger).
Earnings per share at Chevron came in at $3.05, missing the Zacks Consensus Estimate of $3.68 and declining from the year-ago earnings of $5.56 per share. Revenues declined 18.9% year over year to $54.1 billion and outpaced the consensus mark of $54 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 $39 billion and an average daily volume of 21 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 22.5% and a 17% 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.
Vanguard Energy ETF (VDE - Free Report)
Vanguard Energy ETF provides exposure to a basket of 110 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 23.2% and 15% allocation, respectively (read: Guide to Energy Equities ETF Investing).
Vanguard Energy ETF has amassed $8.4 billion in its asset base. It sees a good volume of about 536,000 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)
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 40 stocks in its basket, with Exxon Mobil and Chevron taking the top two positions at 22.1% and 13.7% share, respectively.
iShares U.S. Energy ETF charges 40 bps in fees per year from its investors. It has AUM of $1.3 billion and an average daily volume of about 505,000 shares. The product has a Zacks ETF Rank #2 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 120 stocks in its basket. Of these, XOM and CVX take the top two spots at 23.3% and 15.0%, respectively.
Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 583,000 shares. It has accumulated $1.6 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook (see: all the Energy ETFs here).
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 21.3% and 13.9% share, respectively.
Strive U.S. Energy ETF has gathered $353.2 million in its asset base. It charges 41 bps in fees per year from investors and trades in an average daily volume of 37,000 shares. DRLL has a Zacks ETF Rank #2.