Exxon Mobil Corp. (NYSE:XOM) is not going to lower its dividend no matter what it costs the company. That point came out loud and clear from the company’s latest earnings conference call. This means that XOM stock will continue to have a “strong” dividend yield of about 6.15%. It’s worth at least 32% more, or $74.63 per share, based on its historical dividend yield.
Moreover, based on the company’s historical dividend yield, this is much higher than its average. For example, Morningstar reports that over the past 5 years, its trailing 5-year dividend yield has been 4.96% (almost 5%). We can use this to estimate the normalized target value for XOM stock. For example, if we divide the dividend per share of $3.48 by the average yield of 4.96%, the result is a target price of $70.16 per share. This represents a potential gain of $14.29 or about 26% more based on today’s price of $55.87.
Source: InvestorPlace
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