An Exxon gas station sign is seen in the Brooklyn borough of New York City, on Oct. 6, 2023.
Michael M. Santiago | Getty Images
Four years ago, Exxon Mobil’s reign as the longest-serving component in the Dow Jones Industrial Average abruptly ended when the oil major was replaced by Salesforce in August 2020 in the biggest shake-up in years.
That reshuffling of the Dow was seen as a sign of the times, with the energy sector struggling from a total collapse in oil prices into negative territory during the Covid-19 pandemic. Meanwhile, 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.
XOM v. CRM
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.
Stocks that are kicked out of the Dow typically outperform their replacements.
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.
Salesforce, meanwhile, tumbled 20% Thursday, putting the stock on pace for its worst performance since 2004 after missing Wall Street revenue estimates for the first time in 18 years.
