ExxonMobil vs. ConocoPhillips: Which Oil Major's Stock Buybacks Will Actually Move the Needle?

It's common for major oil companies to allocate a large portion of their free cash flow to "return of capital" activities such as dividends and share repurchases. Take, for example, ExxonMobil (NYSE: XOM) and ConocoPhillips (NYSE: COP).

Both have committed to stock buyback plans. But given the difference in size between the two companies, looking only at the raw dollar figures fails to capture the true game-changer potential of each company's plan.

By examining both buyback plans and other possible catalysts, we can more accurately determine which of these two oil dividend stocks has the greatest chance of "moving the needle."

ExxonMobil and its $20 billion in annual buybacks

In January, ExxonMobil management committed to around $20 billion in share repurchases for 2026. Based on its $5.1 billion in stock buybacks last quarter, the integrated oil and natural gas giant appears on track to meet its goal. But will buybacks on that scale really move the needle for ExxonMobil investors?

Relative to its market cap of around $672 billion, $20 billion represents just under 3% of outstanding shares. Coupled with the stock's 2.5% dividend, these return-of-capital efforts provide investors with an effective yield of 5.5%, if you consider that typically, share repurchases proportionally increase the value of the remaining shares outstanding.

However, while these efforts can provide a steady baseline of long-term total returns for the stock, look to other catalysts that potentially have a needle-moving impact on ExxonMobil stock's long-term upside. Namely, efforts like the company's 2030 plan, which involves steep cost reductions and a pivot toward new business lines such as carbon capture. By 2030, management expects to increase the company's earnings and cash flow by $25 billion and $35 billion, respectively, compared to 2024 levels.

ConocoPhillips and its more vague (but potentially more impactful) catalysts

ConocoPhillips' current target is to dedicate 45% of its operating cash flow to its capital return efforts. It has no specific dollar target for its stock buybacks. This makes sense, given that it's involved only in exploration and production. This makes its earnings more variable than those of an integrated major such as ExxonMobil.

We do, however, have some numbers to work with. In 2025, it bought back $5 billion worth of shares. During the first half of 2026, ConocoPhillips' share buybacks totaled $3 billion. As oil prices remain high, the company could continue buybacks at a similar pace, which would result in $6 billion in shares repurchased for the year. That may sound like pocket change compared to $20 billion, but ConocoPhillips has a market cap of just $159 billion, about a fifth of ExxonMobil's.

As such, $6 billion in buybacks would reduce its outstanding share count by around 3.8%. Add in this stock's dividend, which at current share prices has a forward yield of 2.5%, and this results in an effective total yield of 6.3% on its return-of-capital efforts.

ConocoPhillips' other catalysts are more vague, yet they may offer the potential for greater upside. Management anticipates that three major projects, including its Willow project in Alaska, will drive a "$7 billion free cash flow inflection by 2029."

Yes, ConocoPhillips carries greater execution risk than ExxonMobil. However, $7 billion of incremental free cash will have a greater relative impact on it than the 2030 strategic plan will have on ExxonMobil. Considering this, ConocoPhillips has the greater needle-mover potential of these two energy stocks.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.