Exxon Mobil (XOM) Stock Analysis
Exxon Mobil Dividend
Current Dividend: $3.08
Dividend Yield: 3.8%
Cash Dividend Payout Ratio: 114%
Market Capitalization: 342 B
Enterprise Value: 387 B
Industry: Oil & Gas Integrated
Exxon Mobil (XOM) is a global integrated oil & gas company. It is involved in exploration and production of petroleum products including the transportation and sale of crude oil, natural gas, liquids, and other petroleum products. The company is one of the largest manufacturers of commodity and specialty chemicals in the world.
The company operates in three segments: Upstream (exploration & production), Downstream (manufacturer and sale of products), and Chemical.
Exxon Mobil is one of only a few companies that really plans for the long, long term. This includes the realization that diverse energy supplies will be required.
Dividend Analyzer Checklist
(updated July 2017)
Dividend Safety Score (16/33 points)
Dividend Per Share (ttm): $3.00
Dividend Payout Ratio (ttm): 125%
Dividend Per Share (10 Year Growth): 9%
Cash From Operations (CFO) Per Share (ttm): $6.07
CFO Dividend Coverage (CFO / DPS): 2.0 (2/6 points)
Free Cash Flow (FCF) Per Share (ttm): $2.62
FCF Dividend Coverage (FCF / DPS): 0.9 (0/6 points)
Net Financial Debt: $38710 M
Total Assets: $344209 M
Net Financial Debt / Total Assets: 11% (9/12 points)
Net Financial Debt to EBITDA (ttm): 127%
Total Liabilities to Assets Ratio (Qtr.): 49%
Piotroski Score (1-9) (TTM): (5/9 points)
Profitability & Growth Score (5/33 points)
Revenue (10 Year Growth) *CAGR > 4.14%: -5.0% (0/4 points)
EPS Basic Cont. Operations (10 Year Growth) CAGR > 4.14%: -11.9% (0/4 points)
Cash From Operations (10 Year Growth) CAGR > 4.14%: -7.7% (0/6 points)
Operating Earnings Yield (ttm): 3.7% (0/7 points)
Net Income (ttm): $10040 M
Gross Profit (ttm): $78365 M
Total Assets: $344209 M
Gross Profitability Ratio = GP / Total Assets: 23% (5/12 points)
Cash Return On Invested Capital (CROIC)(tttm): 5%
Return on Invested Capital (ROIC): 5%
Return on Invested Capital (ROIC) (5 Year Median): 16%
Return on Invested Capital (ROIC) (10 Year Median): 19%
Valuation Score (15/34 points)
Free Cash Flow Yield (ttm): 3.2% (4/9 points)
EV to EBIT (ttm): 30.7 (0/9 points)
EV to EBITDA (ttm): 11.2 (5/9 points)
PE10: 12.3 (6/7 points)
Price to Sales Ratio (ttm): 1.4
Price to Book Value (ttm): 1.9
Price to Earnings Ratio (P/E) (ttm): 33.8
TOTAL POINTS – (36/100) (50 is an average score)
*Compound Annual Growth Rate (CAGR)
**A Compound Annual Growth Rate of 4.14% = a 50% gain over 10 years.
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SWOT Analysis For Exxon Mobil
Exxon Mobil has an unmatched ability to complete projects only a few companies could even imagine tackling. Their flexibility to take advantage of opportunities, access capital to finance projects at favorable rates, and deliver on commitments is unmatched.
The combination of Exxon’s ability to be the low cost producer and obtain a cost of capital below its peers provides a powerful moat. Regardless of oil prices, XOM has the ability to beat its competition.
An incredible amount of capital expenditures (over 180 billion in five years) has Exxon in the position to bring on long-life production that will improve margins (versus their competition) and allow the company to temporarily lower its investment level for a few years. By 2018 nearly 50% of their production will come from long-life projects. This improves cash flow and provides support for dividend safety.
Historical levels of profitability are unlikely to be matched anytime soon without higher commodity prices. Like its peers, XOM may be facing several years without the ability to grow revenues.
While low oil prices temporarily hurt all oil companies, the strongest (XOM is THE strongest) are able to take advantage of bargains anywhere on the globe. Those that have the ability are able to buy the best assets at favorable terms.
Lower commodity prices and geopolitical risks are Exxon’s largest threats. There appears to be a rising tide of nationalism around the world. If this trend continues geopolitical risks could bring unforeseen challenges to Exxon production and costs.
In addition, global institutions, particularly governments, are attacking all carbon based businesses. New rules and regulations, in addition to punitive taxes, are all possibilities in this environment.
(updated July 2017)
Exxon Mobil (XOM) is ranked #192 (out of 251) and #6 (out of 17) in the Energy Sector by the Dividend Analyzer .
If the price of oil were to stay low for years (doubtful) this would be the last company standing. If prices rebound it could provide above average rates of return. Exxon Mobil, Helmerich & Payne (HP), and Chevron (CVX) are the only stocks I would consider for the long term in the energy sector at this time. Unless you believe oil prices will increase or you have a very long term view, I would put this stock on your watchlist.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Watchlist
Looking For Exposure to Energy Sector / Watchlist
Deep Value Investors / Watchlist
Portfolio Position Disclosures:
DVB Dividend Kings & Aristocrats: None
DVB Dividend Growth: None
DVB High Income: None
Arbor Asset Allocation Model Portfolio (AAAMP): None
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