Amid nerve-wracking market volatility this year, oil stocks rocketed as crude oil prices hit multiyear highs. Shares of upstream oil and gas giants, in particular, like Chevron (CVX -0.49%) and ExxonMobil (XOM -0.88%), saw frenzied buying activity because the profitability and cash flow for these companies are directly related to oil prices. The higher oil goes, the more money these oil giants make.

With oil prices cooling off over the past few weeks, though, both Chevron and ExxonMobil stocks have receded, offering investors an opportune time to invest. Between the two, which is a better oil stock? Here's the case for both companies to help you decide.

This oil giant looks set to beat its own growth estimates

Neha Chamaria (Chevron): Chevron is one of the world's largest integrated oil producers. Beyond that, it's also trying to build a lower carbon portfolio while ensuring it has the financial fortitude to carry on its traditional business profitably.

To put that into context, Chevron recently acquired Renewable Energy Group in an all-cash deal worth around $3.2 billion to produce biodiesel from feedstock, such as refined vegetable oils. Chevron believes the acquisition is a great fit, as renewable fuels are primarily targeted at heavy industries like transportation, agriculture, and petrochemicals -- all of which are also major oil consumers.

Meanwhile, Chevron is making the most of the current high oil-price environment by not just rewarding shareholders, but also fortifying its balance sheet to lay a stronger foundation for the future. The company already brought down its total debt-to-equity ratio to only 16.7% as of March 31, 2022 and doubled its share-buyback guidance for 2022 to $10 billion at the upper end.

Chevron expects to grow its operating cash flow at an average annual rate of more than 10% through 2026 at the Brent crude price of only $60 per barrel. Given where oil prices are right now, Chevron could end up with even bigger cash flow and therefore pay out bigger dividends, as well. Chevron hasn't just increased dividends every year for 35 consecutive years -- it's doubled its annual per share payout since 2010.

CVX Dividend Chart

CVX Dividend data by YCharts.

Chevron's dividend growth, in fact, has been much stronger than ExxonMobil's in recent years, which speaks volumes about the company's financial fortitude. That's just one of the reasons why I'd pick Chevron over ExxonMobil. 

Cashing in on surging demand for refined products

Matt DiLallo (ExxonMobil): Chevron and Exxon are very similar. They're two of the largest globally diversified, integrated oil and gas producers and starting to expand into lower carbon fuels. They're also Dividend Aristocrats with more than 30 years of consecutive annual dividend increases.

However, if one thing sets Exxon apart from Chevron, it's refining. Exxon has the largest oil refining operations among oil majors. Because of that, it's cashing in on the currently tight market for refined petroleum products.

With demand for gasoline, diesel, and jet fuel soaring, refining margins are widening. That has Exxon poised to deliver huge profits.

Exxon has hinted that its refining earnings could rise by as much as $5.5 billion in the second quarter, compared to what it reported in the first quarter. That would be a record-setting performance for the company's refining segment. When combined with strong upstream earnings, Exxon could deliver up to $19.5 billion of profits in the second quarter.

The company's refining profits could remain strong for quite some time if demand remains robust and margins stay elevated. Exxon is one of the few companies adding refining capacity these days. It invested throughout the last downturn to increase its ability to process U.S. light crude oil by 250,000 barrels per day. Its refining investments run counter to the industry, which is converting oil refineries into renewable fuel-production facilities.

Exxon's soaring refining profits will give it more cash to invest in its energy business -- including its lower carbon ventures -- and to return to investors. The company has already tripled its share-buyback program, aiming to repurchase $30 billion in stock by the end of next year. That's about 50% larger than Chevron's plan, which would see it repurchase a record $10 billion in stock this year. That combination of refining profits and buybacks could give Exxon's stock the fuel to outperform Chevron.

The better oil stock 

Both ExxonMobil and Chevron are on solid footing and are minting money right now as oil prices remain high. While that could make picking one stock a tough call, I'd pay closer attention to Chevron, given its solid dividend track record -- which has meant larger total returns for shareholders over the years -- and its debt-to-equity ratio -- which is among the lowest in the industry.