Exxon Mobil Corporation: Can XOM Stock Keep Its Dividend Safe?

Exxon Mobil Corporation (XOM) is the biggest (by market cap) publicly traded oil company in the world. It’s more than twice the size of its closest rivals. But the big question is, with oil prices so low and global growth looking increasingly worrisome, will XOM’s size be its greatest advantage or its Achilles heel? XOM is a dividend aristocrat, having raised its dividend consecutively for 33 years. Few companies are in that camp. And it’s especially impressive given the fact that Exxon is in some of the most volatile markets and regions on the planet.

XOM usually doesn’t carry a high dividend, so in times like this, where its competitors are trying to cover a 9% for RDS.A, 8.8% for BP, or even a 5.2% for CVX, XOM — even as beaten down as it is — sports a respectable 3.7% and solid payout ratio of 73%. Exxon is continuing to monitor operations upstream and downstream and is looking to increase efficiencies. It is doing everything right as it positions for a continuing grinding energy market. And most importantly, it is using its size to its advantage. It can shutter operations in the high-cost U.S. for example, and ramp up production in lower-cost areas of the world.

Source: InvestorPlace

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