Exxon Mobil's Dividend Hits Lowest Level Since 2014
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 45 minutes ago
0mins
Should l Buy XOM?
Source: CNBC
- Dividend Yield Decline: Exxon Mobil's dividend yield has fallen to 2.7%, the lowest since 2014, slightly above what dating site Match Group offers, indicating challenges in attracting retail investors.
- Options Strategy Recommendation: To address the declining dividend, investors are advised to adopt a 'buy-write' strategy, collecting option premiums to enhance income while retaining the potential for capital appreciation, aligning with the current strong fundamentals and technicals in the market.
- Favorable Market Dynamics: Exxon operates in a favorable environment of capital discipline and market dynamics, with robust energy demand expected, and a focus on high-margin production leading to exceptional free cash flow, keeping its valuation attractive.
- Enhanced Buy-Write Strategy: By selling a vertical call spread at $165 and $170, investors can generate approximately $1.30 credit per share, yielding 0.8-1.0%, while allowing participation in all gains above $170, effectively uncapping the upside that traditional covered calls would limit.
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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: 152.780
Low
114.00
Averages
132.17
High
158.00
Current: 152.780
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.
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- Drilling Progress: The drilling is being conducted by the Stena Carron drillship and is expected to be completed by late July; a successful outcome could enhance the company's competitiveness in the global oil and gas market, particularly with potential discoveries outside the prolific Stabroek block.
- Partnership Structure: Exxon holds a 35% stake in the Canje block, collaborating with TotalEnergies, JHI Associates, and Mid-Atlantic, which hold 35%, 17.5%, and 12.5% stakes respectively, a partnership model that helps mitigate risks and enhance resource sharing.
- Environmental Studies Submission: In 2022, Exxon submitted environmental studies mapping 12 potential drilling sites, demonstrating thorough preparation for the new drilling initiative aimed at ensuring compliance with environmental standards and minimizing ecological impact.
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Exxon Mobil's Dividend Hits Lowest Level Since 2014
- Dividend Yield Decline: Exxon Mobil's dividend yield has fallen to 2.7%, the lowest since 2014, slightly above what dating site Match Group offers, indicating challenges in attracting retail investors.
- Options Strategy Recommendation: To address the declining dividend, investors are advised to adopt a 'buy-write' strategy, collecting option premiums to enhance income while retaining the potential for capital appreciation, aligning with the current strong fundamentals and technicals in the market.
- Favorable Market Dynamics: Exxon operates in a favorable environment of capital discipline and market dynamics, with robust energy demand expected, and a focus on high-margin production leading to exceptional free cash flow, keeping its valuation attractive.
- Enhanced Buy-Write Strategy: By selling a vertical call spread at $165 and $170, investors can generate approximately $1.30 credit per share, yielding 0.8-1.0%, while allowing participation in all gains above $170, effectively uncapping the upside that traditional covered calls would limit.
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- Market Impact: This ruling may bolster investor confidence in Exxon, reducing skepticism regarding its financial transparency, which could positively influence the company's stock price and promote stability in its capital market performance.
See More
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- Jury Verdict: A Texas jury found Exxon Mobil not liable for claims of defrauding investors regarding its Canadian oil sands and Rocky Mountain gas operations, indicating no fraudulent behavior in the company's disclosures.
- Lawsuit Background: The 2016 lawsuit alleged that Exxon concealed losses in its Canadian bitumen operations and failed to properly incorporate carbon-cost assumptions into reserve valuations, leading to investor misunderstandings about the company's financial health.
- Investor Claims: Investors who purchased Exxon common stock between February 24 and October 28, 2016, failed to prove that the company misled them, as indicated by the jury's verdict, which highlighted insufficient evidence to support their claims.
- Market Impact: This ruling helps restore market confidence in Exxon, alleviating investor concerns regarding the company's financial transparency, and may influence litigation strategies in future similar cases.
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- New Drilling Initiative: Exxon Mobil has launched the Goby-1 drilling program in the Canje block offshore Guyana, despite three previous unsuccessful attempts to find commercial hydrocarbons, indicating the company's ongoing confidence in the region's potential.
- Drilling Progress: The drilling is being conducted by the Stena Carron drillship and is expected to be completed by late July; a successful outcome could enhance the company's competitiveness in the global oil and gas market, particularly with potential discoveries outside the prolific Stabroek block.
- Partnership Structure: Exxon holds a 35% stake in the Canje block, collaborating with TotalEnergies, JHI Associates, and Mid-Atlantic, which hold 35%, 17.5%, and 12.5% stakes respectively, a partnership model that helps mitigate risks and enhance resource sharing.
- Environmental Studies Submission: In 2022, Exxon submitted environmental studies mapping 12 potential drilling sites, demonstrating thorough preparation for the new drilling initiative aimed at ensuring compliance with environmental standards and minimizing ecological impact.
See More
Exxon Mobil's Dividend Hits Lowest Level Since 2014
- Dividend Yield Decline: Exxon Mobil's dividend yield has fallen to 2.7%, the lowest since 2014, slightly above what dating site Match Group offers, indicating challenges in attracting retail investors.
- Options Strategy Recommendation: To address the declining dividend, investors are advised to adopt a 'buy-write' strategy, collecting option premiums to enhance income while retaining the potential for capital appreciation, aligning with the current strong fundamentals and technicals in the market.
- Favorable Market Dynamics: Exxon operates in a favorable environment of capital discipline and market dynamics, with robust energy demand expected, and a focus on high-margin production leading to exceptional free cash flow, keeping its valuation attractive.
- Enhanced Buy-Write Strategy: By selling a vertical call spread at $165 and $170, investors can generate approximately $1.30 credit per share, yielding 0.8-1.0%, while allowing participation in all gains above $170, effectively uncapping the upside that traditional covered calls would limit.
See More
Texas Jury Rules Exxon Mobil Not Liable in Investor Fraud Case
- Jury Verdict: A Texas jury ruled that Exxon Mobil (XOM) is not liable for investor claims of fraud related to disclosures about Canadian oil sands and Rocky Mountain gas projects, marking a legal victory for the company.
- Lawsuit Failure Reasons: The jury found that investors failed to prove in their 2016 lawsuit that Exxon concealed losses from its Canadian bitumen operations and did not properly incorporate carbon-cost assumptions into reserve valuations, which influenced the case outcome.
- Impairment Charges Delay: Investors alleged that Exxon delayed recognizing impairment charges related to Rocky Mountain dry gas assets, but this claim was not supported during the jury's deliberation, further solidifying the company's position.
- Climate Change Accounting: This case is reportedly the first securities class action targeting a company's climate change accounting, and although it did not succeed, it provides significant legal precedent for future similar cases.
See More
Texas Jury Finds Exxon Not Liable for Investor Fraud Claims
- Jury Verdict: A Texas jury found Exxon Mobil not liable for claims of defrauding investors regarding disclosures related to its Canadian oil sands and Rocky Mountain gas operations, indicating compliance in information disclosure practices.
- Lawsuit Background: The 2016 lawsuit alleged that Exxon concealed losses in its Canadian bitumen operations, failed to properly incorporate carbon-cost assumptions into reserve valuations, and delayed recognizing impairment charges related to Rocky Mountain dry gas assets, reflecting investor concerns over transparency.
- Investor Claims: Investors who purchased Exxon common stock between February 24, 2016, and October 28, 2016, failed to prove that the company misled them, demonstrating the jury's trust in the company's disclosure practices.
- Market Impact: This ruling may bolster investor confidence in Exxon, reducing skepticism regarding its financial transparency, which could positively influence the company's stock price and promote stability in its capital market performance.
See More
Texas Jury Finds Exxon Not Liable for Investor Fraud Claims
- Jury Verdict: A Texas jury found Exxon Mobil not liable for claims of defrauding investors regarding its Canadian oil sands and Rocky Mountain gas operations, indicating no fraudulent behavior in the company's disclosures.
- Lawsuit Background: The 2016 lawsuit alleged that Exxon concealed losses in its Canadian bitumen operations and failed to properly incorporate carbon-cost assumptions into reserve valuations, leading to investor misunderstandings about the company's financial health.
- Investor Claims: Investors who purchased Exxon common stock between February 24 and October 28, 2016, failed to prove that the company misled them, as indicated by the jury's verdict, which highlighted insufficient evidence to support their claims.
- Market Impact: This ruling helps restore market confidence in Exxon, alleviating investor concerns regarding the company's financial transparency, and may influence litigation strategies in future similar cases.
See More
U.S.-China Summit Sparks Market Optimism
- Strong Market Performance: U.S. stocks surged on the first day of the Trump-Xi summit, with the S&P 500 closing above 7,500 for the first time and the Dow Jones Industrial Average jumping 370 points back to 50,000, reflecting investor optimism about improved bilateral relations.
- Strategic Stability Agreement: Trump and Xi agreed to foster a 'constructive China-U.S. relationship of strategic stability', laying the groundwork for future trade and tech cooperation, which could enhance economic integration between the two nations.
- Major Commercial Deal: Trump announced that China will order 200 Boeing jets, seen as a significant win for the U.S. planemaker, which is expected to positively impact Boeing's performance and potentially boost the related supply chain.
- Tech Stocks Shine: AI chipmaker Cerebras saw its shares skyrocket 68% in its Nasdaq debut, reaching a market cap of $95 billion, highlighting the strong demand for high-growth AI companies and further driving up tech stock valuations.
See More
