While the options market can be a useful indicator, it is not 100% accurate. For example, longer-dated options on some of XLE’s largest holdings were recently pricing in the possibility of dividend cuts by those companies. [Dividend Issues for Energy ETFs]
However, Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), the two largest U.S. oil companies and XLE’s two biggest holdings, recently announced capital spending reductions that included buyback cuts and suspensions, but no negative dividend news. Schlumberger (NYSE: SLB), the world’s largest oilfield services provider, recently announced a 25% dividend increase, bringing its payout to $2 per share per year. The stock is XLE’s third-largest holding.
Energy Select Sector SPDR Fund
