DJIA - Occidental Petroleum Vs. Exxon Mobil: Which Is The Better Buy?

• Beleaguered by environmental groups, depletion of easy sources, and their own size, all the oil majors struggle with the problem of replacing reserves.
• Exxon is the longtime class act of the industry and has great capital discipline but reserves dwindled by 27% since 2000; the disastrous purchase of XTO in 2009 didn't help.
• OXY overpaid to win Anadarko in a bidding war with Chevron, then nearly went under as the oil price collapsed in 2020.
• The subsequent oil price recovery solidified XOM's dividend and gave OXY a chance to pay down debt from the merger and begin to reap its benefits.
• XOM is a dividend stock. Buffett likely sees OXY as a great operating company, a hedge against commodity inflation, and a call option on the price of oil.

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