XOM earned two Stars in this section for 3.) and 4.) above. It has paid a cash dividend to shareholders every year since 1882 and has increased its quarterly cash dividend payments for 26 consecutive years. The 1-Yr. > 5-Yr Growth metric indicates that dividend growth has been accelerating. XOM earned no Stars in this section, and had one Star deducted for a negative NPV MMA Diff. In effect, if you invested equal amounts in a MMA earning of an average of 4.61% for 20 years and XOM stock with a dividend yield of 1.81% and growing at 6.4% annually, you would end up with $3,288 less in XOM stock per $1,000 invested. Other: XOM is a member of the S&P 500, is an Achiever and an Aristocrat. XOM is a strong player in the volatile, cyclical and capital-intensive energy sector. XOM is one of the few companies with sufficient resources to pursue deepwater, liquefied natural gas (LNG). Conclusion: XOM lost a Star in the Fair Value section, earned two Stars in the Dividend Analytical Data section and lost a Star in the Dividend Income vs. MMA section for a net total of 0 Stars. This rates XOM as a 0 Star-Avoid stock. Linked here is a PDF copy of my analysis of Exxon Mobil Corp (XOM) (alt.1, alt.2). Below are some highlights from the above linked analysis:
Company Description: Exxon Mobil Corp. (XOM) is engaged in the exploration, production, and sale of crude oil, natural gas, petroleum products and petrochemicals. XOM is the world's largest publicly owned integrated oil company.
Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:
XOM is trading at a premium to all except 2.) above. If I exclude the high and low valuation, and average the remaining two valuations, XOM is trading at a 19.8% premium. A Star is deducted since XOM is trading at such a large premium.
Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:
Cutting to the chase, XOM is overvalued and not currently a good dividend investment. Using my D4L-PreScreen.xls model, I determined the dividend growth rate would have to average 15.1% for XOM to generate a $3,000 NPV of MMA Differential that I look for from a company that is both an Achiever and an Aristocrat. That is more than double the 6.4% historical number.
Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.
Full Disclosure: At the time of this writing, I do not own shares of XOM (0.0% of my Income Portfolio).
What are your thoughts on XOM?
Recent Stock Analyses:
Stock Analysis: Exxon Mobil Corp (XOM)
Posted by D4L | Monday, July 07, 2008 | analysis | 4 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
The fact is that there are many interesting high-yielding companies that have good long-term prospects. Besides, as the markets get more vol...
-
A common measure of dividend sustainability is the payout ratio, the percent of earnings that are paid out to shareholders. Unfortunately, e...
-
Part of the joy of investing is seeing your good investments continue to grow, years after your initial purchase. Aside from the financial s...
-
Good income investments often come with strong dividend yields, delivering income that's higher than an investor could find at a bank or...
-
A lot changes when you shift from working to retirement, including how you invest. Most investors switch from building a nest egg to living ...
-
Last month we wrote about the top four companies in our model portfolio in the article 4 Dividend Dominators for 2021 - Companies With More ...
-
Both of the listed stocks are often discussed on the Reddit page, and for very different reasons. The former pays a frequent special dividen...
-
Interest rates remain very low and given the ongoing economic impact from COVID-19, they will likely stay very low. This low-rate environmen...
-
When it comes to dividend stocks, investors can fall into the trap of focusing on dividend yield over all else. That can be a dangerous stra...
-
Safety and tranquility are both important aspects of investing for retirement. Yes, we want stocks with meaningful upside. We also -- howeve...

I started buying XOM in 2006 at around $61 with a DSPP and set up monthly payments to be drafted out of my checking account but when it broke $80 in 2007 I stopped buying except for DRIPS.
I agree wait for this to get back into the $50’s or $60’s before buying.
Bob: I have watched CVX and XOM for some time now looking for the right opportunity to buy in. I don't expect it will come anytime soon.
Thanks for stopping by!
Best Wishes,
D4L
D4L,
I came upon your site looking for resources which tell you what the tangible book value is for a company. Do you have any free / pay sites that has that data so I can do my own due diligence? Thanks.
Johnny Cash
Johnny Cash: I get tangible book value from an S&P report provided by my broker Scottrade. It can easily be calculated from most online free sites that provide a balance sheet. Yahoo finance has the line called "Intangible Assets". It is simply equity less intangibles (goodwill, patents, licenses, etc.)
Hope that helps.
Best Wishes,
D4L