Exxon Mobil, Chevron May Be Best Bets

Exxon Mobil(XOM Quote) and Chevron(CVX Quote), the only two "big oil" companies whose shares are rated "buy" by TheStreet.com Ratings, may hand investors the best returns as the price of crude plummets.

Marathon Oil(MRO Quote), Sunoco(SUM Quote), Hess(HES Quote), BP(BP Quote), Royal Dutch Shell(RDSA Quote) and Petrobras(PBR Quote) are tagged with "hold" recommendations, held back by the volatility of their stock prices and depressed profits.

The price of crude oil crashed from almost $150 a barrel in July 2008 to the $30s in late February. Crude oil in New York declined as much as 5% today, the most in two weeks, hurt by the dollar's advance and a drop in stock markets in the U.S. and Europe.

Still, the Organization of Petroleum Exporting Countries has agreed to production cuts of 4.2 million barrels a day since September, propping up prices. OPEC didn't further curb output at a March 15 meeting. The group will convene again May 28.

The consensus among analysts is that Exxon Mobil's earnings per share will be cut in half this year, tumbling from $8.69 in fiscal 2008 to $4.35. The forecasts are worse for Chevron, which analysts estimate will take a 58% hit, dropping from $11.67 to $4.85. But as the economy starts to expand, expected by some analysts to occur close to the end of the year, Exxon Mobil's per-share net is expected to recover 44% next year to $4.25 while Chevron's is forecasted to vault 56% to $7.55.

Although Exxon Mobil's "reward," "risk" and "overall" marks are one to two notches higher than those earned by its smaller competitor, a compelling case can be made that Chevron makes a better choice as a "value" investment.