ExxonMobil Poised to Become a Dividend King
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: NASDAQ.COM
- Dividend Growth Potential: ExxonMobil has raised its dividend for 43 consecutive years and is on track to join the Dividend Kings within the next decade, with a current yield of 3%, which is likely to attract more income-focused investors.
- Diversified Business Advantage: With over 16,000 miles of pipelines in North America, ExxonMobil's upstream, midstream, and downstream operations provide resilience against oil price volatility, particularly benefiting from rising oil prices where upstream revenue growth outpaces expenses.
- Global Resource Allocation: Operating in over 56 countries, ExxonMobil sources most of its oil and gas from the U.S., but by expanding in the Permian Basin and increasing production in high-growth markets across Latin America, it effectively reduces dependence on the Middle East, enhancing its competitive position.
- Profitability and Cash Flow: The company is expected to achieve an EPS of $11.71 in 2023, a 75% increase from last year, while spending 92% of its free cash flow on dividends over the past 12 months, demonstrating strong profitability and cash flow management capabilities.
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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: 136.440
Low
114.00
Averages
132.17
High
158.00
Current: 136.440
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an integrated fuels, lubricants and chemical company. Its 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. The Energy Products segment includes fuels, aromatics, and catalysts and licensing. The 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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- Oil Price Volatility Impact: The outbreak of the U.S.-Iran war has caused historic volatility in global oil prices, with Brent crude surging from $70 to $113, prompting Exxon to raise its upstream income outlook by $3.5 billion to $3.9 billion, reflecting the company's agile response to market dynamics.
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- Oil Price Volatility Impact: The outbreak of the U.S.-Iran war has caused historic volatility in global oil prices, with Brent crude surging from $70 to $113, prompting Exxon to raise its upstream income outlook by $3.5 billion to $3.9 billion, reflecting the company's agile response to market dynamics.
- Market Sentiment Shift: Retail sentiment on Stocktwits remains neutral, yet discussions surged by 240% from the previous session, indicating heightened market interest in Exxon’s outlook, which could drive further stock price increases.
- Earnings Report Preview: Exxon is set to release its complete earnings report on July 31, with Q1 earnings per share at $1.16, surpassing the $1.03 consensus estimate, and revenues reaching $85.14 billion, showcasing the company's resilience and profitability in challenging conditions.
See More
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- Refining Profit Improvement: The company expects an additional $3.3 billion in earnings from refining and chemicals, which not only enhances overall profitability but also reflects its competitive advantage in a high oil price environment.
- Derivative Gains: Exxon Mobil forecasts around $2.6 billion in profit from derivative positions linked to physical deliveries, indicating the company's agility in risk management and response to market volatility.
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- Geopolitical Risks Heightened: Crude oil prices surged to a 1.5-week high due to attacks on shipping in the Strait of Hormuz, raising inflation expectations and pushing bond yields higher, with the 10-year T-note yield reaching a 3.5-week high of 4.54%, adding uncertainty to the market.
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- Demand Growth Forecast: According to Shell's LNG Outlook 2026, global liquefied natural gas demand is expected to increase by 700 million tons by 2050, representing a 65% surge from 2025 levels, which will enhance the long-term investment value of related energy stocks.
- U.S. LNG Dominance: The U.S. has emerged as the world's largest LNG exporter, with significant growth in LNG exports over the past decade, bolstering investor confidence in LNG stocks, particularly in the context of energy independence.
- ExxonMobil's Expansion Plans: ExxonMobil is undertaking four large-scale LNG projects, expecting to double its LNG capacity by 2030, adding 40 million metric tons annually, demonstrating strong bullish sentiment towards the LNG market's future.
- Long-Term Investment Opportunities: Cheniere Energy is set to complete three expansion projects in the coming years, with projected distributable cash flow reaching $4.75 billion to $5.25 billion by 2026, further solidifying its leadership position in the LNG sector.
See More
Surging LNG Demand Creates Investment Opportunities
- Demand Growth Forecast: According to Shell's LNG Outlook 2026, global LNG demand is expected to increase by 700 million tons by 2050, representing a 65% surge from 2025 levels, which presents significant market opportunities for related companies.
- ExxonMobil's Investments: ExxonMobil is undertaking four large-scale LNG projects, expecting to double its LNG portfolio by 2030 from 2020 levels, which could increase its annual output by 40 million metric tons, demonstrating strong confidence in the LNG market.
- Cheniere Energy's Expansion: Cheniere Energy is working on three expansion projects, with one expected to be fully operational this year and the other two coming online in 2028 and 2029, projecting distributable cash flow of $4.75 billion to $5.25 billion by 2026, showcasing its stable cash flow capabilities.
- Energy Transfer's Growth: Energy Transfer reported $185 million in EBITDA growth in its natural gas liquids and refining business in the first quarter, indicating strong growth momentum in the North American midstream market while actively investing to meet energy demands from data centers.
See More
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- Quality Stock Selection: This ETF tracks an index of high-yield U.S. dividend stocks, currently holding 75 stocks with an annual dividend yield of 2.9%, nearly three times that of the S&P 500, indicating its strong competitive edge in dividend investing.
- Sector Drivers: The fund's high exposure to energy stocks, particularly ExxonMobil and Chevron, which are up 14% and 11% respectively, has significantly boosted its performance, while strong gains from healthcare stocks like AbbVie and Merck have also contributed to its growth.
- Growth Potential: Since its inception in 2011, the iShares Core High Dividend ETF has delivered over 10% annualized returns, and with its focus on high-quality dividend stocks, it is expected to continue providing stable income and growth opportunities for investors.
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