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Why This Dividend Aristocrat Stock is a 'Strong Buy' Right Now
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Exxon Mobil (XOM - Free Report) benefited from the global economic comeback in 2021. The oil and gas titan continues to grow in 2022 alongside rebounding travel and the Russian invasion that's driving prices even higher.
Exxon Mobil Basics
Exxon Mobil is a well-rounded oil and gas titan that took a hit, alongside the entire industry, during the initial covid shock that sent oil prices tumbling. Oil prices rebounded in a serious way off their covid lows and floated between roughly $50 and $80 a barrel in 2021.
Exxon Mobil last year posted its strongest profit since 2014 and its revenue soared 57% to $285.6 billion. XOM’s impressive FY21 showing came well before oil prices really took off. Oil began the year at $75, with it now around $116 a barrel. And some on Wall Street project that oil could reach $150 a barrel by the end of the summer.
Exxon Mobil, like most of the industry, spent years cutting costs following the last boom. The company has continued to spend on growth, but it has slowed its capital expenditures rather significantly. XOM is passing on those savings to its customers, as it sees its cash pile grow amid soaring oil prices.
XOM more than doubled its Q1 FY22 profit. Plus, Exxon Mobil said it would triple its share repurchases to $30 billion through 2023.
Along with its buybacks, Exxon Mobil is also a Dividend Aristocrat, with a yield of 3.7% at the moment to top its highly-ranked industry’s 3.5% average. XOM’s standing as a so-called Dividend Aristocrat means it’s one of roughly 65 S&P 500 companies that’s paid and raised dividends for at least 25 straight years.
Image Source: Zacks Investment Research
What Else?
Zacks estimates call for XOM’s sales to climb by another 30% in 2022 to reach roughly $371 billion to help lift its adjusted earnings by 91%. The nearby chart highlights XOM’s strong adjusted earnings revisions activity, with its FY22 estimate up 18% in the last few months and FY23’s consensus 21% higher.
Exxon Mobil’s impressive EPS revisions help it land a Zacks Rank #1 (Strong Buy) right now. Exxon Mobil also grabs an overall “A” VGM grade and its industry is in the top 20% of over 250 Zacks industries.
XOM stock has climbed 50% in the last year to outpace its industry’s 35% run and the market’s 12% decline. This stretch includes a 55% jump in 2022 that’s helped it recover from a rough stretch between 2014 and the initial covid selloff. The stock has pulled back recently and it closed regular hours Wednesday about 10% below its June 8 levels.
Despite the post-covid rebound and the great first half of 2022, Exxon trades at a 40% discount to its own 10-year median at 10.2X forward earnings and well below its own highs. On top of that, Exxon is focused on expanding its low-carbon businesses as it attempts to diversify for a greener energy future.
Bottom Line
The S&P 500 entered a bear market on Monday and the Fed raised rates by 0.75% on Wednesday, after May’s CPI data showed no signs of slowing inflation. Some investors might want to stay on the sidelines amid all of the selling and the economic uncertainty.
But parking your money in cash comes with an 8.5% inflation tax at the moment. Instead, it might be worth buying some strong dividend-paying stocks that are looking to return value to shareholders, just like Exxon Mobil.
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Why This Dividend Aristocrat Stock is a 'Strong Buy' Right Now
Exxon Mobil (XOM - Free Report) benefited from the global economic comeback in 2021. The oil and gas titan continues to grow in 2022 alongside rebounding travel and the Russian invasion that's driving prices even higher.
Exxon Mobil Basics
Exxon Mobil is a well-rounded oil and gas titan that took a hit, alongside the entire industry, during the initial covid shock that sent oil prices tumbling. Oil prices rebounded in a serious way off their covid lows and floated between roughly $50 and $80 a barrel in 2021.
Exxon Mobil last year posted its strongest profit since 2014 and its revenue soared 57% to $285.6 billion. XOM’s impressive FY21 showing came well before oil prices really took off. Oil began the year at $75, with it now around $116 a barrel. And some on Wall Street project that oil could reach $150 a barrel by the end of the summer.
Exxon Mobil, like most of the industry, spent years cutting costs following the last boom. The company has continued to spend on growth, but it has slowed its capital expenditures rather significantly. XOM is passing on those savings to its customers, as it sees its cash pile grow amid soaring oil prices.
XOM more than doubled its Q1 FY22 profit. Plus, Exxon Mobil said it would triple its share repurchases to $30 billion through 2023.
Along with its buybacks, Exxon Mobil is also a Dividend Aristocrat, with a yield of 3.7% at the moment to top its highly-ranked industry’s 3.5% average. XOM’s standing as a so-called Dividend Aristocrat means it’s one of roughly 65 S&P 500 companies that’s paid and raised dividends for at least 25 straight years.
Image Source: Zacks Investment Research
What Else?
Zacks estimates call for XOM’s sales to climb by another 30% in 2022 to reach roughly $371 billion to help lift its adjusted earnings by 91%. The nearby chart highlights XOM’s strong adjusted earnings revisions activity, with its FY22 estimate up 18% in the last few months and FY23’s consensus 21% higher.
Exxon Mobil’s impressive EPS revisions help it land a Zacks Rank #1 (Strong Buy) right now. Exxon Mobil also grabs an overall “A” VGM grade and its industry is in the top 20% of over 250 Zacks industries.
XOM stock has climbed 50% in the last year to outpace its industry’s 35% run and the market’s 12% decline. This stretch includes a 55% jump in 2022 that’s helped it recover from a rough stretch between 2014 and the initial covid selloff. The stock has pulled back recently and it closed regular hours Wednesday about 10% below its June 8 levels.
Despite the post-covid rebound and the great first half of 2022, Exxon trades at a 40% discount to its own 10-year median at 10.2X forward earnings and well below its own highs. On top of that, Exxon is focused on expanding its low-carbon businesses as it attempts to diversify for a greener energy future.
Bottom Line
The S&P 500 entered a bear market on Monday and the Fed raised rates by 0.75% on Wednesday, after May’s CPI data showed no signs of slowing inflation. Some investors might want to stay on the sidelines amid all of the selling and the economic uncertainty.
But parking your money in cash comes with an 8.5% inflation tax at the moment. Instead, it might be worth buying some strong dividend-paying stocks that are looking to return value to shareholders, just like Exxon Mobil.