NEW YORK (TheStreet) -- Let me start off by saying I am all for returning cash to shareholders. I want to be clear about that so my inbox is not filled with hate mail from those investing for income, like my Dad. With that said, times are different, especially in the ever-changing energy sector, so companies not beefing up capital expenditures and investing for growth may actually be doing their shareholders a major disservice.
There is so much happening today in the energy sector with heightened talks of climate change, increased fuel standards, more regulations on carbon output and a wider adoption of renewable energy sources. Not more readily accepting change and investing in new technologies to boost efficiency may limit upside for investors. Using the last 12 months as an example, ConocoPhillips (COP) said it would boost capital spending in 2014 and the market rewarded the company's plan with a 23% boost to its stock price. This compares with rivals like Exxon Mobil (XOM) and Chevron (CVX) which saw their stock prices elevate 13% and 3% respectively during the same time period.
Exxon said it plans to cut capex by $2.7 billion in 2014, while Chevron basically left its unchanged at $38 billion. However, Chevron also said it would sell up to $10 billion in non-core assets over the next few years, Exxon just sold over $1.1 billion. So if companies like Exxon and Chevron are not more heavily re-investing in growth opportunities, is getting slimmer and just hiking a dividend, something both companies just did, really the best way to deploy capital to shareholders?