Chevron vs ConocoPhillips: Which Is the Better Buy as Energy Sector Crushes the Market?

Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP) have both delivered strong returns as energy dominates 2026. The Energy Select Sector SPDR Fund (NYSE: XLE) is up 21.56% year-to-date through February 13, making energy the top-performing sector. Chevron has climbed 20.56% year-to-date, slightly ahead of ConocoPhillips’ 19.04% gain. Both are crushing the S&P 500, but their recent earnings reveal two very different energy stories.

Integrated Giant Meets Pure-Play Explorer

Chevron reported Q4 2025 revenue of $46.87 billion, missing estimates, but adjusted EPS of $1.52 beat expectations. The company’s record production jumped 12% year-over-year, driven by the Hess acquisition, which added 261 thousand barrels of oil equivalent per day. CEO Mike Wirth called it a “significant achievement…integrated Hess, started-up major projects, delivered record production.” Chevron’s integrated model spans upstream production, refining, chemicals, and emerging energy ventures, including lithium and hydrogen projects. The company returned $12.1 billion in share buybacks for the year and raised its dividend 4% to $1.78 per share.

ConocoPhillips operates as a pure-play exploration and production company. Its Q4 2025 revenue of $14.19 billion missed estimates, and adjusted EPS of $1.02 also fell short. Net income dropped 37.3% year-over-year as realized prices declined 19% to $42.46 per barrel of oil equivalent. While total production reached 2,320 thousand barrels per day, underlying production declined 2.6% excluding the Marathon acquisition. CEO Ryan Lance emphasized “driving $1 billion reduction in capital and costs in 2026” and highlighted the company’s “best-in-class asset base…deepest and most capital-efficient Lower 48 inventory.” ConocoPhillips returned $9 billion to shareholders, representing 45% of cash flow from operations.

Venezuela Catalyst vs. Cost Discipline

Chevron is expanding its global footprint and diversifying into new energy technologies. The company is reportedly in talks to expand its oil license in Venezuela, a potentially significant catalyst that could unlock additional production where Chevron already operates under U.S. sanctions waivers. This geographic and product diversification positions Chevron to capture multiple revenue streams beyond traditional oil and gas.

ConocoPhillips is taking the opposite approach: optimize, consolidate, and return cash. The company doubled Marathon synergies to a $1 billion run-rate and is targeting $7 billion in incremental free cash flow by 2029. Its focus on Lower 48 shale inventory offers capital efficiency but less geographic diversification. Wolfe Research lowered its price target to $122 from $126.

Dividend Income and Valuation

Both companies appeal to income investors. Chevron yields 3.88% with a forward P/E of 24. ConocoPhillips yields 3.02% with a forward P/E of 17, making it cheaper on an earnings basis. ConocoPhillips trades at a discount despite returning a higher percentage of cash flow to shareholders.

Key Catalysts to Monitor

Chevron offers diversified exposure through its integrated business model, Venezuela expansion opportunities, and new energy ventures, providing multiple revenue streams when oil prices fluctuate. ConocoPhillips focuses on capital efficiency and aggressive shareholder returns, returning 45% of cash flow to shareholders, though its narrower pure-play focus means less geographic diversification. Key catalysts to monitor include whether Chevron secures expanded Venezuelan access and whether ConocoPhillips can stabilize underlying production while delivering on its $1 billion cost-cutting targets.