Shell's Latest LNG Move Has Me Rethinking My Oil Major Pecking Order. Here's Where I'd Rank Exxon and Chevron Now.

Companies make mistakes all the time. Sometimes, those mistakes are bad enough that a stock isn't worth owning. That was my thinking about Shell (NYSE: SHEL) after it cut its dividend in 2020. Today, however, roughly six years after that event, I think the company has proven that it has gotten back on track. And I'm putting Shell back on the list of integrated energy majors that I believe are worth considering.

TotalEnergies: The energy major I own

TotalEnergies (NYSE: TTE), BP (NYSE: BP), and Shell all made the same basic announcement in 2020. These integrated energy companies were going to begin focusing more on building clean-energy businesses. However, there was a huge difference in how Shell and BP proceeded compared to TotalEnergies. Both Shell and BP cut their dividends, while TotalEnergies made it clear that it was committed to maintaining and growing its dividend over time.

It seems like a long time ago now, but 2020 was the height of the coronavirus pandemic. Oil prices plunged as governments around the world shut their economies down in the hope of slowing the spread of COVID. Shell and BP cutting their dividends made some sense. However, TotalEnergies, ExxonMobil (NYSE: XOM), and Chevron (NYSE: CVX) all maintained or continued growing their dividends, so I simply removed BP and Shell from the list of energy giants I'd be willing to own.

To be fair, both companies have begun increasing their dividends again. However, both companies have also walked back their commitment to clean energy. That was a second strike, and it kept both off my list for years. TotalEnergies, by comparison, has continued to invest in clean energy, which now makes up around 8% of the company's adjusted net operating income in the first half of 2026. That's down from last year, but only because of higher oil prices, which boosted the company's upstream business, and improved profitability in the refining sector. The company's commitment to its dividend and its diversification into the clean energy sector are why I own it.

Shell has worked its way back onto my list

Since the dividend cut, Shell has dramatically reduced its leverage. Shell has also been focusing on the increasingly important natural gas segment of the energy sector. Natural gas is being used as a transition fuel as the world shifts toward clean energy. Liquefied natural gas (LNG) is a key part of the story. The company's most recent move was to double the export capacity of a large Canadian LNG export facility.

This decision, made with the company's partners in the LNG facility, is timely. Countries are reconsidering energy security amid the geopolitical conflict in the Middle East. Canada is an economically and politically stable country, which will likely make it an attractive source of LNG for other Western countries. It is a good move, and given the reduced leverage and the stock's well-above-market 2.9% dividend yield, I think it is time I took it out of the penalty box. BP, by comparison, continues to have leverage issues and is still not worth owning, in my opinion.

Back on the list, but not at the top of it

I'm not switching out of TotalEnergies anytime soon because I still like its diversification into the clean energy sector. In fact, it is unique among the integrated energy majors. And if I had to pick one of the others, I'd probably go with Chevron because it has a more attractive 3.1% dividend yield and a stronger dividend history(38 consecutive annual dividend increases) than Shell.

However, Shell might be worth considering over Exxon, which has a 2.3% yield, but only for those willing to overlook the 2020 dividend cut (Exxon's dividend has been increased annually for 43 years). Still, the big change for me is that Shell is back on my list of integrated energy stocks to consider owning.

Reuben Gregg Brewer has positions in TotalEnergies Se. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.