A senior research analyst at Bernstein is making the case that investors are measuring oil major dividends against the wrong benchmark, and that the comparison makes stocks like Exxon Mobil and Chevron look considerably more attractive to income-focused portfolios.
Bob Brackett, Bernstein Research's senior energy analyst, laid out the argument on a recent episode of The Real Eisman Playbook, according to Yahoo Finance. His core claim: oil major dividends move with inflation in a way that fixed Treasury coupons simply cannot.
"Don't compare the yields you get from a commodity company to government yields. Compare them to TIPS. These are inflation protected," Brackett told host Steve Eisman.
The reasoning turns on a basic difference between a bond and a barrel of oil. A 10-year Treasury currently pays 4.57% in nominal terms. The 10-year TIPS real yield is 2.16%. TIPS, or Treasury Inflation-Protected Securities, adjust for changes in the purchasing power of the dollar. Brackett argues that oil company dividends do the same thing, because oil prices themselves tend to rise when the dollar loses value.
Brackett put it directly: "My 3% dividend from Exxon, if the dollar devalues, the barrel of oil gets more valuable and they'll sustain that."
The numbers behind Exxon's position are substantial. The company posted a $1.03 per share dividend for Q2 2026, payable June 10, and has a 43-year streak of dividend growth. Exxon plans $20 billion in share repurchases in 2026. Underlying Q1 2026 earnings rose to $8.77 billion from $7.58 billion a year earlier. CEO Darren Woods described Exxon as "a fundamentally stronger company than it was just a few years ago, built to perform through disruption and across market cycles." Exxon shares are up 30% year to date and 55% over one year, helped by WTI crude trading near $112.25 per barrel as of mid-May.
Brackett also pointed to 2020 as evidence that these dividends can hold up under pressure. When COVID-19 caused demand to collapse by roughly 20 million barrels per day, Exxon, Chevron and ConocoPhillips all maintained their dividends. European competitors Shell, BP and Total cut theirs during the same period.
That distinction matters to Brackett's broader case. Oil majors now return between $30 billion and $50 billion annually through dividends and buybacks while still growing, a sharp contrast to the pre-2017 era when management prioritized production volume over shareholder returns. The shift in capital discipline, combined with the inflation-protection argument, forms the basis of his current positioning in Exxon and Chevron.
