ExxonMobil Achieves 373% Total Return Since Dow Removal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Outstanding Stock Performance: Since being removed from the Dow on August 31, 2020, ExxonMobil has achieved a staggering 373% total return, demonstrating its strong recovery capability amid market volatility and attracting increased investor interest.
- Successful Strategic Adjustments: In its corporate plan released in 2025, ExxonMobil expects to achieve $25 billion in earnings growth and $35 billion in cash flow growth by 2030, indicating a focus on sustainable development through efficiency improvements rather than capital expenditures.
- High Return on Investment: ExxonMobil forecasts a return on capital employed exceeding 17% by 2030, with cumulative surplus cash flow projected to reach $145 billion under the assumption of $65 Brent crude oil prices, further enhancing its financial robustness.
- Dividend Stability: With 43 consecutive years of dividend increases, ExxonMobil stands out as a favored high-dividend stock for investors, reflecting its stability and attractiveness in uncertain market conditions.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 150.630
Low
114.00
Averages
132.17
High
158.00
Current: 150.630
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Iran Conflict Drives Oil Prices Surge
- Oil Price Surge Impact: Since March, the conflict in Iran has driven Brent crude prices to over $120 per barrel by late April, propelling oil stocks like ExxonMobil, which rose 13% in March alone.
- Asset Advantage: As the second-largest oil company globally, ExxonMobil boasts low-cost, high-quality production assets, particularly in the Permian Basin and Guyana, with a target of 50% of new wells utilizing its lightweight proppant technology by the end of 2026.
- Financial Performance Volatility: Despite a 6% hit to global oil-equivalent production due to the Iran conflict, Exxon's net income fell to $4.5 billion in Q1, yet its global supply chain and advantaged assets position it well to navigate supply disruptions.
- Consistent Shareholder Returns: ExxonMobil has achieved $15.6 billion in cumulative structural cost savings since 2019 and returned $9.2 billion to shareholders in Q1 alone, including $4.3 billion in dividends, demonstrating stability and commitment to investors amid market turmoil.
See More
ISS Recommends Shareholders Reject Exxon's Relocation Proposal
- Shareholder Voting Advice: Institutional Shareholder Services (ISS) advised shareholders on Tuesday to reject Exxon Mobil's (XOM) proposal to relocate its incorporation to Texas, arguing that such a move would impose greater hurdles in holding directors and officers accountable, potentially impacting corporate governance transparency.
- Relocation Motivation Analysis: Exxon aims to end its registration in New Jersey, with CEO Darren Woods stating that moving to Texas would help protect the company from shareholder 'abuse,' particularly frivolous lawsuits in certain jurisdictions, which could affect operational efficiency.
- Employee Distribution Status: Exxon noted that approximately 30% of its global workforce is already based in Texas, and all of its U.S. research facilities are located there, indicating a growing business focus in Texas that could enhance the rationale for the relocation proposal.
- Support for Shareholder Proposal: ISS also recommended that shareholders support a resolution from the New York City Police Pension Fund aimed at making it easier for retail investors to vote against the board's wishes, further empowering shareholders in corporate governance.
See More
U.S. Beer Sales Decline Unexpectedly Amid Rising Gas Prices
- Sales Decline: U.S. beer, full malt beverages, and cider volumes fell 6.3% year-over-year through the week ending May 2, according to Nielsen data, indicating significant consumer spending pressure amid rising costs.
- Convenience Store Struggles: Sales in convenience stores like 7-Eleven and Wawa dropped approximately 9% year-over-year in the two weeks since April 26, highlighting the adverse effects of high gas prices on impulse purchases, particularly as average gas prices reached $4.51 per gallon.
- High Gas Price Markets: California, the state with the highest gas prices at about $6.16 per gallon, experienced a 16% decline in beer volume from the four weeks ending April 4 to the four weeks ending May 2, with Arizona and Texas also seeing notable declines of 10% and nearly 7%, respectively.
- Consumer Sentiment Decline: U.S. consumer sentiment hit a record low in May, with one-third of respondents citing gas prices as their primary concern, indicating that while brands like Michelob Ultra remain stable, the overall market faces significant challenges.
See More
Proxy Advisors Recommend Against Exxon and Chevron Proposals
- Shareholder Proposal Opposition: Proxy advisory firms Glass Lewis and ISS have recommended that investors vote against Exxon's plan to redomicile in Texas at the upcoming shareholder meeting, indicating strong concerns over corporate governance.
- Pressure for Climate Risk Assessment: Exxon and Chevron have faced ongoing shareholder proposals urging them to evaluate climate change and human rights risks, reflecting growing investor emphasis on sustainability that could influence the companies' future strategic directions.
- Upcoming Annual Meetings: Both companies are set to hold their annual shareholder meetings on May 27, and the recommendations from proxy advisors may significantly impact voting outcomes, potentially leading to profound changes in corporate governance structures.
- Influence of Proxy Advisors: The recommendations from proxy advisors are closely monitored, and their opposition could diminish shareholder trust in management, thereby affecting support for future proposals and initiatives.
See More
U.S. Beer Sales Plummet 6.3% Amid Rising Gas Prices
- Sales Decline: U.S. beer, full malt beverage, and cider volumes fell 6.3% year-over-year through the week ending May 2, reflecting a significant drop in consumer confidence to multi-year lows, with the decline exceeding expectations and indicating market fragility.
- Convenience Store Pressure: The convenience channel has seen a notable 9% year-over-year drop in volumes over the two weeks since April 26, closely tied to reduced gas station traffic and impulse purchases, suggesting that rising gas prices are impacting consumer spending behavior.
- High Gas Price Impact: Average U.S. gasoline prices have surged approximately 52% since the onset of the Iran conflict, with California's prices reaching $6.16 per gallon, leading to a 16% decline in beer volumes over four weeks, highlighting the intensifying consumer pressure in high fuel cost markets.
- Brand Performance Divergence: While overall sales are declining, AB InBev's Michelob Ultra remains stable, whereas Bud Light and Budweiser are experiencing double-digit volume declines, with Boston Beer performing the worst, Molson Coors losing market share, and Constellation Brands gaining traction against competitors.
See More
ExxonMobil's Outlook for the Next Five Years
- Strong Stock Performance: Over the past five years, ExxonMobil's shares have surged more than 150%, significantly outperforming the S&P 500's gain of approximately 80%, highlighting its stability and attractiveness as a blue-chip investment.
- Diversified Business Model: Operating in over 56 countries, ExxonMobil benefits from high oil prices in its upstream business, while its stable midstream operations generate consistent profits by charging for resource transportation, making it a more appealing investment than standalone companies.
- Future Growth Potential: Analysts project a 19% CAGR for EPS from 2025 to 2028, and if ExxonMobil meets these estimates, its stock could rise about 60% over the next five years, indicating strong growth prospects ahead.
- Strategic Expansion Initiatives: To reduce reliance on the Middle East, ExxonMobil is investing in high-growth markets like Guyana, while also expanding LNG exports and its carbon capture and storage business, further driving future earnings growth.
See More
Iran Conflict Drives Oil Prices Surge
- Oil Price Surge Impact: Since March, the conflict in Iran has driven Brent crude prices to over $120 per barrel by late April, propelling oil stocks like ExxonMobil, which rose 13% in March alone.
- Asset Advantage: As the second-largest oil company globally, ExxonMobil boasts low-cost, high-quality production assets, particularly in the Permian Basin and Guyana, with a target of 50% of new wells utilizing its lightweight proppant technology by the end of 2026.
- Financial Performance Volatility: Despite a 6% hit to global oil-equivalent production due to the Iran conflict, Exxon's net income fell to $4.5 billion in Q1, yet its global supply chain and advantaged assets position it well to navigate supply disruptions.
- Consistent Shareholder Returns: ExxonMobil has achieved $15.6 billion in cumulative structural cost savings since 2019 and returned $9.2 billion to shareholders in Q1 alone, including $4.3 billion in dividends, demonstrating stability and commitment to investors amid market turmoil.
See More
ISS Recommends Shareholders Reject Exxon's Relocation Proposal
- Shareholder Voting Advice: Institutional Shareholder Services (ISS) advised shareholders on Tuesday to reject Exxon Mobil's (XOM) proposal to relocate its incorporation to Texas, arguing that such a move would impose greater hurdles in holding directors and officers accountable, potentially impacting corporate governance transparency.
- Relocation Motivation Analysis: Exxon aims to end its registration in New Jersey, with CEO Darren Woods stating that moving to Texas would help protect the company from shareholder 'abuse,' particularly frivolous lawsuits in certain jurisdictions, which could affect operational efficiency.
- Employee Distribution Status: Exxon noted that approximately 30% of its global workforce is already based in Texas, and all of its U.S. research facilities are located there, indicating a growing business focus in Texas that could enhance the rationale for the relocation proposal.
- Support for Shareholder Proposal: ISS also recommended that shareholders support a resolution from the New York City Police Pension Fund aimed at making it easier for retail investors to vote against the board's wishes, further empowering shareholders in corporate governance.
See More
U.S. Beer Sales Decline Unexpectedly Amid Rising Gas Prices
- Sales Decline: U.S. beer, full malt beverages, and cider volumes fell 6.3% year-over-year through the week ending May 2, according to Nielsen data, indicating significant consumer spending pressure amid rising costs.
- Convenience Store Struggles: Sales in convenience stores like 7-Eleven and Wawa dropped approximately 9% year-over-year in the two weeks since April 26, highlighting the adverse effects of high gas prices on impulse purchases, particularly as average gas prices reached $4.51 per gallon.
- High Gas Price Markets: California, the state with the highest gas prices at about $6.16 per gallon, experienced a 16% decline in beer volume from the four weeks ending April 4 to the four weeks ending May 2, with Arizona and Texas also seeing notable declines of 10% and nearly 7%, respectively.
- Consumer Sentiment Decline: U.S. consumer sentiment hit a record low in May, with one-third of respondents citing gas prices as their primary concern, indicating that while brands like Michelob Ultra remain stable, the overall market faces significant challenges.
See More
Proxy Advisors Recommend Against Exxon and Chevron Proposals
- Shareholder Proposal Opposition: Proxy advisory firms Glass Lewis and ISS have recommended that investors vote against Exxon's plan to redomicile in Texas at the upcoming shareholder meeting, indicating strong concerns over corporate governance.
- Pressure for Climate Risk Assessment: Exxon and Chevron have faced ongoing shareholder proposals urging them to evaluate climate change and human rights risks, reflecting growing investor emphasis on sustainability that could influence the companies' future strategic directions.
- Upcoming Annual Meetings: Both companies are set to hold their annual shareholder meetings on May 27, and the recommendations from proxy advisors may significantly impact voting outcomes, potentially leading to profound changes in corporate governance structures.
- Influence of Proxy Advisors: The recommendations from proxy advisors are closely monitored, and their opposition could diminish shareholder trust in management, thereby affecting support for future proposals and initiatives.
See More
U.S. Beer Sales Plummet 6.3% Amid Rising Gas Prices
- Sales Decline: U.S. beer, full malt beverage, and cider volumes fell 6.3% year-over-year through the week ending May 2, reflecting a significant drop in consumer confidence to multi-year lows, with the decline exceeding expectations and indicating market fragility.
- Convenience Store Pressure: The convenience channel has seen a notable 9% year-over-year drop in volumes over the two weeks since April 26, closely tied to reduced gas station traffic and impulse purchases, suggesting that rising gas prices are impacting consumer spending behavior.
- High Gas Price Impact: Average U.S. gasoline prices have surged approximately 52% since the onset of the Iran conflict, with California's prices reaching $6.16 per gallon, leading to a 16% decline in beer volumes over four weeks, highlighting the intensifying consumer pressure in high fuel cost markets.
- Brand Performance Divergence: While overall sales are declining, AB InBev's Michelob Ultra remains stable, whereas Bud Light and Budweiser are experiencing double-digit volume declines, with Boston Beer performing the worst, Molson Coors losing market share, and Constellation Brands gaining traction against competitors.
See More
ExxonMobil's Outlook for the Next Five Years
- Strong Stock Performance: Over the past five years, ExxonMobil's shares have surged more than 150%, significantly outperforming the S&P 500's gain of approximately 80%, highlighting its stability and attractiveness as a blue-chip investment.
- Diversified Business Model: Operating in over 56 countries, ExxonMobil benefits from high oil prices in its upstream business, while its stable midstream operations generate consistent profits by charging for resource transportation, making it a more appealing investment than standalone companies.
- Future Growth Potential: Analysts project a 19% CAGR for EPS from 2025 to 2028, and if ExxonMobil meets these estimates, its stock could rise about 60% over the next five years, indicating strong growth prospects ahead.
- Strategic Expansion Initiatives: To reduce reliance on the Middle East, ExxonMobil is investing in high-growth markets like Guyana, while also expanding LNG exports and its carbon capture and storage business, further driving future earnings growth.
See More
