Chevron and ConocoPhillips look like the best bets among major U.S. oil companies as second-quarter earnings season approaches, according to Goldman Sachs.

Both companies are producing substantial cash and are trading at attractive valuations, Goldman analyst Neil Mehta wrote in a note after the market closed on Thursday. Exxon Mobil (ticker: XOM), while it has an attractive dividend and growth prospects overseas, has gotten expensive by comparison.

Mehta said he has had some pushback from investors after initiating coverage on Chevron  (CVX) with a Buy rating, given Chevron’s heavy exposure to the Permian Basin, the largest shale play in the United States. The Permian is a promising area, of course, but there are challenges there—including evidence that the “decline rate” at some wells is higher than expected, indicating that the area could become less productive. But Mehta thinks Wall Street’s worries are overdone, and that Chevron’s decline rate will rise at a manageable rate through 2025. In addition, Chevron ranks better than its largest rival on some key metrics.

“Relative to its closest peer, Exxon, Chevron has a lower capital spending growth rate and a higher production growth rate through 2023,” Mehta wrote in his May initiation note.

Mehta also likes ConocoPhillips (COP), which has underperformed the Energy Select Sector SPDR (XLE) by 14% this year. Its dividend is smaller than its peers, which may be contributing to its weakness. It yields just 2% versus 3.8% for Chevron and 4.5% for Exxon. But Mehta thinks the company might release “news around increasing the size of its capital returns program (including in the form of a dividend increase, a special dividend or further increase to buyback program)” at a November analyst day.

Mehta is less optimistic about Exxon Mobil’s stock, given its current valuation and its plans to spend heavily on projects over the next few years. “We see Exxon as less favorably positioned given the capital intensity of the business in the coming 5 years,” he wrote. He rates the stock at Neutral.

Exxon Mobil and Conoco were little changed on Friday. Chevron was up 0.5%, in line with the gain in the Dow Jones Industrial Average.

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