Exxon trouncing Salesforce since software stock replaced oil giant in the Dow four years ago

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Stocks that are kicked out of the Dow typically outperform their replacements.

Exxon Mobil was replaced by Salesforce as Dow component in August 2020, a shakeup seen a sign of the energy sector's weakness and tech's strength.

But the oil major's stock has gained nearly 170% since the announcement of its exit from the Dow, while Salesforce has gained just 4% over the same period.The reshuffling of the Dow in August 2020 was seen as a sign of the times, with the energy sector struggling from total collapse in oil prices into negative territory during the Covid-19 pandemic, while technology stocks booked strong gains during the work-from-home era.

In retrospect, however, Exxon's fall from grace was short lived. The oil major's stock has gained nearly 170% since the August 24, 2020 announcement of its exit from the Dow, while Salesforce has gained just 4% over the same period.When dividends are accounted for, the drubbing is even more drastic with Exxon returning 220% to investors over that time. Salesforce just initiated a dividend earlier this year.

The reopening of the global economy and the Russian invasion of Ukraine sent energy prices soaring in 2022, breathing new life into the energy sector. Exxon Mobil hit an all-time closing high this year of $122.20 on April 10 as boiling tensions in the Middle East lifted oil prices., putting the stock on pace for its worst performance since 2004 after missing Wall Street revenue estimates for the first time in 18 years.AI hype is lifting these dividend payers.

 

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