From the end of 1998 until the summer of 2008, ExxonMobil reported annual earnings per share growth of 21%. Chevron reported earnings per share growth of 26%. When oil prices rose substantially, the profits of the two American supermajors grew at a pace we typically associate with a tech startup—not a stodgy oil company that is supposed to be all about the dividends and moderate profit growth. And of course, both Exxon and Chevron were delightful investments over this time frame. Exxon returned 14% annually from the start of 1998 until the peak of oil prices in 2008, and Chevron returned 12.5% over that same time frame.
But here is what I find personally interesting: the price of oil was unusually low throughout extended periods in the 1980s and 1990s, and these two oil stocks did especially well during this drought. In fact, it was a golden age of … Read the rest of this article!