Stock Analysis ExxonMobil Corp. (XOM) Current Yield 2.2%

ExxonMobil Corp. (XOM) Current Yield 2.2%

Exxon Mobil Corporation was incorporated in the State of New Jersey in 1882. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. ExxonMobil is a major manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. ExxonMobil also has interests in electric power generation facilities. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses.

Exxon Mobil is not only the largest Major Integrated Oil & Gas Company, it is the largest publically traded company in America.  It’s a low beta, safe investment. Because of its sheer size it has become increasingly more and more difficult for the management team to move the earnings needle. Nonetheless, the fundamentals of Exxon Mobil are superb:

ExxonMobil is part of the elite Dividend Champion list, increasing its dividend payments for 28 straight years. The yield of 2.2% is low, but with a payout ratio of 25.6% there is considerable room for growth. It has kept is Dividend Growth Rate steady at 8.7% for the last 7 years. The ROE and SGR numbers are well above average and best in breed. It has the best balance sheet of the group. It is currently trading at a premium to its historic P/E ratio.

Modeling ExxonMobil 10 year return using its EPS growth rate we arrive at a slightly above average return:

If you are looking for a safe and stable oil play ExxonMobil might be your best bet. Furthermore, with ExxonMobil improving fundamentals the market should soon begin to recognize these achievements. 

All the best,

C