It's time for a clash of the titans -- the oil industry titans, that is. 

Let's look at the stock market's largest oil company, ExxonMobil (NYSE:XOM), and America's largest independent oil and gas exploration and production company, ConocoPhillips (NYSE:COP), to see which one looks like a better buy right now. 

Oil pouring from a barrel.

ExxonMobil and ConocoPhillips are both top oil industry companies. But Exxon has a downstream operation that Conoco lacks. Image source: Getty Images.

Weathering the storm

Oil and gas industry performance has suffered across the board since oil prices began their slump in 2014. And with no rebound in the forecast, companies have had to adjust their operations to cope with the "new normal." 

ConocoPhillips has been coping by cutting costs and refocusing its efforts on higher-margin projects. Last quarter, it made some significant moves in this area by selling off its stake in several of its Canadian oil-sands assets to its former partner, Cenovus Energy. It also unloaded low-margin projects in the San Juan Basin. And although the company isn't yet profitable under current conditions, it is generating plenty of cash.

ExxonMobil is also making gobs of cash, and unlike Conoco, it hasn't had to sell any of its assets. The reason is Exxon's robust downstream operations, which have been offsetting the company's losses on the production side. Indeed, in Q1, Exxon's production division still posted a loss, albeit a tiny one. But its overall profitability is enough to win in this category.

Winner: ExxonMobil.

Dividend

By now, oil and gas investors are well aware of the risks of investing in this industry, especially if they bought in before 2014. The silver lining to malaise afflicting the energy sector is that many oil and gas stocks -- including Exxon and Conoco -- pay a dividend, which can help to tide investors over until the storm has passed. 

Unfortunately for investors, many of those dividends have been slashed over the past few years as companies shore up their balance sheets to weather the prolonged storm. In 2015, for example, ConocoPhillips cut its quarterly dividend from $0.74 per share to $0.25. For 2017, it increased the payout to $0.265, but it's still a far cry from where it was. However, given how far the company's share price has fallen -- from over $86 in 2014 to under $45 today -- that still amounts to a 2.36% yield. Not fantastic, but best in class among oil and gas exploration and production companies. 

ExxonMobil, on the other hand, is one of the few oil companies that hasn't cut its dividend (my favorite oil stockApache, is another). In fact, Exxon has steadily raised its quarterly dividend, from $0.69 a share in 2014 to $0.77 today, for a 3.8% yield. In fact, along with Chevron, Exxon is the only so-called "dividend aristocrat" -- a company that has raised its dividend annually for more than 25 consecutive years -- among oil companies today. It's not likely to risk that designation by cutting or freezing its dividend. 

Although Conoco's management probably did the right thing by cutting the dividend, a yield is a yield, and currently, Exxon's is much higher. Plus, Exxon's is likely to continue to grow as the company maintains its dividend aristocrat status.

Winner: ExxonMobil.

Prospects

Past performance and current dividend yield, though, tell only half the story of a company. Investors should be much more concerned with where a company's going. And ConocoPhillips and ExxonMobil have both been clear about their plans moving forward.

Conoco announced its strategy in November. Its plan is to jettison less-profitable assets and use the proceeds to reduce its debt and reward shareholders through dividends and buybacks rather than spending the cash to boost production growth. The asset sales in Q1 represented a huge step forward in executing this strategy, allowing Conoco to reach its debt target of $20 billion by the end of 2017. It also allowed the company to increase its stock-buyback authorization from $3 billion to $6 billion.Make no mistake: This is a very shareholder-friendly strategy.

ExxonMobil, on the other hand, is staying the course. The company is continuing its operations and reporting some successes, such as a major oil sandstone discovery in Guyana. It's also expanding, buying a 25% stake in a Mozambique gas field and announcing an expansion of a Singapore petrochemical plant. For all this activity, though, the company's production remains flat and unprofitable. With no apparent changes in the works, it's unclear when this strategy will pay off for investors.

Winner: ConocoPhillips.

Investor takeaway

Right now, thanks to its superior internal returns and a higher dividend, ExxonMobil looks like the better buy. That said, you should still keep an eye on ConocoPhillips to see whether its shareholder-friendly strategy can pay off and return it to profitability. Exxon shareholders should also be keeping an eye on the company's production numbers, and if they don't start getting better soon, it may be time to look for better performance elsewhere.

John Bromels owns shares of Apache. The Motley Fool owns shares of ExxonMobil. The Motley Fool has a disclosure policy.